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CAA suspends fuel farm house contract process




  • The Civil Aviation Authority (CAA) on Saturday suspended the process of awarding contract of fuel farm house at the under construction New Benazir Bhutto International Airport (NBBIAP), wherein Pakistan State Oil (PSO) and Attock Petroleum Limited (APL) were competing to get the award, it is learnt. Sources privy to the development told Business Recorder here on Saturday that the authority had stopped the process on the pressure of one of the competing parties. 

    He said that both Oil Marketing Companies (PSO and ARL) were making all out efforts to get the contract. Both the companies claimed securing the contract for establishing the fuel farm, its operation and maintenance of hydrant refuelling system at the New Benazir Bhutto International Airport. APL submitted a bid of 40 paisa per litre as well as a share in profit margin of hydrant access charge, while PSO offered a bid of 1.01 paisa per litre. 

    According to a CAA official, initially at NBBIAP fuel farm”s storage capacity would be around 10,000 tons with the possibility of expansion up to 21,000 tons and the total estimated cost of the farm is Rs 1.5 billion. The CAA needs to award fuel farm contact as early as possible, as the authority has already taken a long time in awarding the contract, an official said, adding that the construction of fuel storage will take two years, while the government is planning to inaugurate the Airport ahead of schedule. 

    Sources said that bids had been invited for the establishment of the fuel farm, operations and maintenance of hydrant refuelling system at the new airport from pre-qualified parties – PSO, Shell Pakistan and APL. However, only PSO and APL submitted their bids for the project on March 28 this year in the office of the Infrastructure Project Development Facility (IPDF). The project is being developed on public-private partnership where CAA is laying the hydrant re-fuelling system and the fuel farm will be established by a private party. The project will operate on open access model where any OMC can supply fuel to airlines against a throughput charge to the fuel farm operator. 

    Sources said that the government-owned fuel supply company was trying to influence the CAA for getting the contract, which is against open market competition. The CAA is developing New Benazir Bhutto International Airport near Fateh Jang, District Attock, some 30 kilometres away from the current airport in Islamabad. It would be the biggest airport in Pakistan both in terms of annual passenger and cargo handling capacity. The construction of a passenger terminal building is underway and the government is hopeful of making the airport operational by 2014. 

    Copyright Business Recorder, 2012

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