Financial Daily from THE HINDU group of publications
Thursday, Jul 15, 2004
Financial Daily from THE HINDU group of publications Thursday, Jul 15, 2004 |
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Corporate
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Outlook Logistics - Airlines BPCL looks for partners in airport privatisation Archana Chaudhary
Mumbai , July 14 BHARAT Petroleum Corporation Ltd, one of the latest entrants to the Fortune 500 list, is looking for partners to participate in the privatisation of Mumbai and Delhi airports. The oil company hopes to join one of the domestic and overseas investors' consortia that will bid for a share in the airport privatisation. According to senior officials, this will give the company an edge over private oil companies looking for a share in the retail and aviation business. It will also mean high returns for a relatively small investment. BPCL is looking at a 10 per cent stake in both the airports. "Roughly 60 per cent of the total airline business in India comes from the Mumbai and Delhi airports. Naturally, we would like to be there. We are trying to find a partner before submitting our expression of interest. We could partner with the Airports Authority of India or with any other Indian or foreign company," a senior BPCL official told Business Line. The Union Cabinet, while limiting the foreign direct investment to 49 per cent, has allowed domestic companies to pick up a 10 per cent stake in the modernisation of both airports. Those interested in the projects includes a consortium of GMR, Fraport AG Frankfurt Airport Services Worldwide and the India Development Fund and the Sunil Mittal-owned Bharti Group which has formed a consortium with the Changi Airport of Singapore, which plan to bid for the modernisation programme of Delhi and Mumbai airports. The company's board of directors has cleared the proposal for submitting an expression of interest for the proposed privatisation. Although sale of aviation turbine fuel or ATF forms only two to three per cent of the total oil business in India, industry observers believe this could be an important flashpoint for competition in the near future. With private players, especially Reliance Industries, entering the scene, oil PSU majors are consolidating their turf. Also, presence at the airport is being looked upon as a brand building opportunity. "No other business is as stringent about quality and operational efficiency (as aviation). Several foreign oil companies have separate aviation fuel companies. For instance, Shell has Shell Aviation. BP, ExxonMobil... they all have separate companies for the aviation business," the official said.
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