airports economic regulatory authority ofindia **·l

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Airports Economic Regulatory Authority of India **·l<--X·* AERA Building, Administrative Complex, Safdarjung Airport, New Delhi - 110 003 Dated the 15 th September, 2010 Direction under Section 15 read with Section 13 of No.AERA/20015/Ff/2010-11 (02/2010-11) -----Whereas the Airports Economic Regulatory Authority of India (hereinafter referred to as the 'Authority'), established under "The Airports Economic Regulatory Authority of India Act, 2008 " (hereinafter referred to as the 'Act') is to perform the functions in respect of major airports, inter alia, to determine the tariff for the aeronautical services; to determine the amount of the development fees in respect of major airports; to determine the amount of the passengers service fee levied under rule 88 of the Aircraft Rules, 1937 made under the Aircraft Act, 1934; and to monitor the set performance standards relating to quality, continuity and reliability of service as may be specified by the Central Government or any authority authorized by it in this behalf. 2. Whereas as per section 2(a)(v) of the Act, any service provided for supplying fuel to the aircraft at an airport is an 'aeronautical service' and the tariff for such aeronautical service at a major airport is therefore to be determined by the Authority in terms of Section 13 (1) (a) of the Act. 3. Whereas any levy of charges in connection with the supply of fuel at a major airport, without the previous approval of the Authority, is in contravention of section 13 oftheAct. 4. Whereas under section 15 of the Act, the Authority, may for the purpose of discharge of its functions under the Act, issue, from time to time to the service providers, such directions as it may consider necessary. 5. Whereas Mis. Delhi Aviation Fuel Facility Private Limited (DAFFPL), have vide their letter no.nil dated 26.07.2010 (Annexure-I), sated that they propose to charge an infrastructure charge (to maximum of) <987.25/KL which will be effected from 28.07.2010 and have stated that they have taken over the existing facilities from Mys.Bharat Petroleum Corporation Ltd (BPCL) (storage tanks, hydrants, IT & SCADA systems, equipments, plant, building and ancillary facilities) and are additionally Page 1 of g

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Page 1: Airports Economic Regulatory Authority ofIndia **·l

Airports Economic Regulatory Authority of India **·l<--X·*

AERA Building, Administrative Complex,

Safdarjung Airport, New Delhi - 110 003

Dated the 15th September, 2010

Direction under Section 15 read with Section 13 of

No.AERA/20015/Ff/2010-11 (02/2010-11) -----Whereas the Airports Economic Regulatory Authority of India (hereinafter referred to as the 'Authority'), established under "The Airports Economic Regulatory Authority of India Act, 2008" (hereinafter referred to as the 'Act') is to perform the functions in respect of major airports, inter alia, to determine the tariff for the aeronautical services; to determine the amount of the development fees in respect of major airports; to determine the amount of the passengers service fee levied under rule 88 of the Aircraft Rules, 1937 made under the Aircraft Act, 1934; and to monitor the set performance standards relating to quality, continuity and reliability of service as may be specified by the Central Government or any authority authorized by it in this behalf.

2. Whereas as per section 2(a)(v) of the Act, any service provided for supplying fuel to the aircraft at an airport is an 'aeronautical service ' and the tariff for such aeronautical service at a major airport is therefore to be determined by the Authority in terms of Section 13 (1) (a) of the Act.

3. Whereas any levy of charges in connection with the supply of fuel at a major airport, without the previous approval of the Authority, is in contravention of section 13 oftheAct.

4. Whereas under section 15 of the Act, the Authority, may for the purpose of discharge of its functions under the Act, issue, from time to time to the service providers, such directions as it may consider necessary.

5. Whereas Mis. Delhi Aviation Fuel Facility Private Limited (DAFFPL), have vide their letter no.nil dated 26.07.2010 (Annexure-I), sated that they propose to charge an infrastructure charge (to maximum of) <987.25/KL which will be effected from 28.07.2010 and have stated that they have taken over the existing facilities from Mys.Bharat Petroleum Corporation Ltd (BPCL) (storage tanks, hydrants, IT & SCADA systems, equipments, plant, building and ancillary facilities) and are additionally

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Page 2: Airports Economic Regulatory Authority ofIndia **·l

investing on infrastructure for integrating the existing facility with T-3 and the estimated cost of the project provisionally comes to around ~546 crores and the valuation of assets offered by BPCL is under finalization and they have paid an amount of~80 crores to BPCL.

6. Whereas any levy of charges in connection with the supply of fuel at a major airport, without the previous approval of the Authority, is in contravention of section 13 of the Act and M/s.DAFFL, without obtaining any approval from the Authority for the levy of the fuel facility infrastructure charges have implemented the said charges.

7. Whereas the request for approval of charges by was made M/s.DAFFL on 26.07.2010, which was received in the office ofthe Authority only on 29.07.2010, and the proposed charges were implemented, without waiting for the consideration of the Authority; w.e.f. 28.7.2010, i.c., even before the request was received by the Authority.

8. Whereas the Authority is in the process of considering the request made by M/s.DAFFL for approval of the new fuel facility infrastructure charges and is of the opinion that without the withdrawal of the charges levied by M/s.DAFFL it would not be in a position to effectively discharge its function of determination of the fuel facility infrastructure charges as proposed by them and is further of the opinion that the continuance of the levy of these charges would be a continuing violation of the provisions of the Act;

9. Now, therefore, in terms of powers conferred on it under Section 15 read with Section 13 of the Act, the Authority hereby directs M/s.DAFFL to stop charging the fuel facility infrastructure charges, at IGI Airport, New Delhi, with effect from 28.07.2010 until their request for approval of the charges is decided by the Authority.

By the Order ofand in the name s:Authority

.J..J 'l.---­. "\4(\...!-.:.:.-_ -­(San<teep Prakash)

Secretary

To, 1. Delhi Aviation Fuel Facility Private Limited,

Uran Bhawan, Opp ATC Complex IGI Airport, . New Delhi - 110 037. (Through: Shri Pradeep Panicker, Authorised Signatory)

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Page 3: Airports Economic Regulatory Authority ofIndia **·l

Copy to :­

1. Secretary, Ministry of CivilAviation, Rajiv Gandhi Bhawan, New Delhi - 110003.

2. Shri Kiran Kumar Grandhi, Managing Director, Delhi Aviation Fuel Facility Private Limited, Uran Bhawan, Opp ATC Complex, IGI Airport, New Delhi - 110 037·

3. Shri Amitabh Khosla, Country Director - lATA, International Air Transport Association, 207-208, Kailash Building, 26, Kasturba Gandhi Marg, New Delhi.

4. Shri R Sareen, Executive Director (Aviation), Indian Oil Corporation Ltd., (Navy Land), Indian Oil Bhawan, G-9m Ali Yavar Jung Marg, Bandra (E), Mumbai­400051.

5. Shri S.P.Mathur, Executive Director (Aviation), Bharat Petroleum Corporation Ltd., Bharat Bhavan, 4&6 Currimbhoy Road, Ballard Estate, Mumbai 400 001.

6. Shri K.Srinivas, Head, Aviation SBU, Hindustan Petroleum Corporation Ltd., 17, Petroleum House, Jamshedji Tata Road, Mumbai 400 020.

7. Indian Oil Sky Tanking Limited., Fuel Farm 1,Bengaluru international Airport, Devanahalli, Bangalore-googoo.

8. Mys. Essar Oil Ltd., Essar Techno Park Building II, Swan Mill Compound, L.B.S. Marg, Kurla (W), Mumbai-aoo 070.

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Page 4: Airports Economic Regulatory Authority ofIndia **·l

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DELI-I( AVIATION FUEL FACIL IT Y (P) LT I~==========-. \ew { d:l:lll (lhall a II, Opp, .\'l'( ' Co IIIpin . ":eal' I Iliel',l:l li"n", Tll'lll illa i -.

;(;1 '\ irpu vt ";",v Del h; IIIllU 7

July 26 , 2010

To

The Secretary Airport Economic Regulatory Authority of India AERA buil di ng Administrative Complex Safdarjang Airport New Delhi -110003

Dear Sir,

Subject: Infrastructure Charges of Aviation Fuel FacilitY

DIAL has, through competitive bidding process appointed us for the provision of the Aviation Fuel Facility services at the IGI Airport .

In terms of the said concession agreement we have been mandated to Finance, Design, Develop, Construct, Operate, Manage and ma-intain the Aviation Fuel Facility. For the said services we hereby propose to charg~ an infrastructure charge (to maximum of) 987.25/KL. This charqe will be effected from July 28t h , 2010 .

We have taken over the existing facility of BPCL comprlslng of the ATF storage tanks aggregati ng to 42,000 KL, Hydrants to Termi nal 2 and Cargo Termi nal, IT and SCADA systems, associ ated test i ng, safety and envi ronmental faci 1 i ties, and the structures, buildings, plant and equipment thereon and ancillary facilities.

We are also additionally investing nn the infrastructure which includes the cost towards new hydrant system , integration cost for integrating existing facility with T3, investment in stock, and expenses towards testing and commissioning. The esti mated Cost of our proj ect provi si onall y comes to around Rs. 546 cr.

Currentl y the val uati on of assets offered by BPCL is under finalization and till date we have paid a sum of Rs. 80 cr . to BPCL.

Rcgd. Office: New Udaan Bhawan, Opp, ATC Complex, Neal' Intcrnational Tcrminal IGI Airport

New Dclhi-II0037

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".. L~ ,.

DEL H I AVIATION FUEL FAC ILI'l' V (P) LTD. ''\en' I dOlan 111111\\ '111 , Opp. XI ( ( 'o lll p ln :. ",ca r In le r n a tion al I"Tll l ill :tl

J( ; It\ i' porf '\ e ,~ I)d;", i lil ilJ 7

We would like to inform you that: ­

This is an existing infrastructure charge being charged by the oi 1 compani es as part of thei r fuel cost, We have been made to understand that present1 y BPCL is chargi ng Hydrant Charges and AFS charges of approx Rs,17501 k1,which is included in the fuel charges being charged by them.

2 The proposed cha rg e is lower than the prevail ing charge being charged by the Oil Companies .

3 Thi s infrastructure charges of Rs .987 .251 k1 wi 11 replace the BPCL 's existing inf ras tructu re charge , which formed part of fuel cost billed by BPCL .

We request char ge .

AERA to approve the above Fuel Infrastructure

Assuring you of co-ope ration at all times

Yours faithfully,

For Delhi Aviation Fuel Facility (P) Ltd.

Authorized Signatory

Regd, Offi cc: New Udaa n Bhawan, Opp, ATC Complex, Ncar International Terminal IGI Airport

New Delhi-ll 0037