Integrated fuel facility at Mumbai airport gets CCI nod

Fair trade watchdog CCI has approved setting up of an integrated aviation fuel facility in Mumbai by a joint venture of three state-owned oil firms and Mumbai International Airport Pvt Ltd after they agreed to put in place measures to prevent anti-competitive practices.
Indian Oil Corp Ltd, Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Mumbai International Airport Pvt Ltd would form an equal joint venture.
Post execution of shareholding pact between them, each would have 25 per cent stake in Mumbai Aviation Fuel Farm Facility Ltd, which is currently a wholly-owned subsidiary of Mumbai International Airport.
The green signal has come after the Competition Commission of India (CCI) sought clarifications on many occasions from the concerned parties since the watchdog had earlier formed a prima facie opinion that the deal would be anti-competitive.

The clearance is subject to a host of conditions, including amendments to the existing shareholders' agreement that was inked in March this year.
After taking into account the voluntary commitments offered by the parities, CCI in its 16-page order said the "proposed combination is not likely to have an appreciable adverse effect on competition in India".

Noting that the combination is about integration and upgradation of existing fuelling infrastructure and operations at the Mumbai Airport, CCI said "there could be competition enhancing benefits associated with the creation of such a facility".
In its order dated September 29 and made public today, CCI said that with the commitments offered by parites, "participation of non-oil PSU player (s) in the ownership of the MAFFFL (Mumbai Aviation Fuel Farm Facility) would be possible in future".

The regulator has directed the parties to make the necessary changes in the agreement and get the same approved by their respective boards.
The parties are required to "furnish the copies of the respective board resolutions alongwith the amended and restated agreements within 30 days of the passing of the aforesaid board resolutions," the order said.
Besides amendments to the pact, the joint venture has been asked to publish on its website various details -- including those related to applicable tariff and storage capacity -- as part of safeguard measures.
For this combination, CCI has considered the relevant market as infrastructure facilities at the Mumbai airport for the receipt, storage, handling and delivery of the aviation fuel to the aircrafts at the airport.