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Mumbai Airport plans new jet fuel facility

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Sneha Kupekar Mumbai

Likely to form a joint venture with IOC, BPCL and HPCL.

Mumbai International Airport (MIAL), owned by a GVK Power & Infrastructure (GVKPIL)-led consortium, is likely to form a joint venture operations group, with three public sector oil companies to provide a single point distribution and refuelling ATF (aviation turbine fuel) facility at the airport.

The three oil PSUs (Public Sector Units) are Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL).

A senior official from an oil PSU said: “The talks are still on, but yes, we are looking at having a single point ATF facility at MIAL, for which an operations group between the four is under consideration. However, no structure or such has been finalised.”

 

A spokesperson at MIAL said, “This is yet to be formalised and hence, we would not like to comment at this stage.”

Another source from the oil industry confirmed the development. “The discussions have been on for quite sometime, roughly two years. However, due to some glitches, it hadn’t taken off. The operations group, as orally agreed to, was to have a 25 per cent stake for each of the companies. But I don’t think the final agreement will be reached anytime soon.”

The move will streamline the process of ATF distribution and refuelling. Also, it would save costs for the three oil PSUs, which together dispense around 210,000 kilo litres of ATF at MIAL every month.

However, oil analysts aren’t too optimistic about the extent of cost saving. A Mumbai-based analyst with a brokerage company said: “Oil and gas is a predominantly capital-intensive industry. So, by having a single point for refuelling planes, they’ll just save on their administrative costs. But I don’t think it will be a large amount, as ATF itself does not account for a large part of an oil company’s business.”

Since refuelling, storage etc are to be done from a single point, the move is likely to open up around 15-20 acres for land-strapped MIAL. Mumbai Airport has about 2,000 acres, out of which 1,000 acres are occupied. Even after the slum dwellers, occupying a large chunk of MIAL land, are shifted, only about 210 acres will be available for MIAL.

MIAL is the country’s second-busiest airport, with over 600 flights a day, and the passenger traffic is expected to go up to 29-30 million this year, which will cross pre-recession levels.

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First Published: Aug 15 2010 | 12:12 AM IST

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