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Gujarat seeks Rs 6,600 cr from Centre for GSPL gas projects

Press Trust of India  |  New Delhi 

After state-owned Ltd, government has sought Rs 6,600 crore from the Central government to partly fund two gas pipeline projects of its firm GSPL including one taking the fuel to Jammu and Kashmir.

State Petronet Ltd (GSPL) had in 2011 quoted rock-bottom tariff to win rights to lay gas pipeline from Mehsana in to Bhatinda in and onwards to Jammu and as well as one from Mallavaram on the east coast to and Bhilwara in Rajasthan, but has since then struggled to begin work on laying the lines.

"The Government of Gujarat in the month of October, 2016 has requested the Ministry of Petroleum & Natural Gas to consider a capital grant of 40 per cent" for the Mehsana- Bhatinda-Jammu-Pipeline (MBJSPL) and Mallavaram- Bhopal-Bhilwara-Vijaipur Pipeline (MBBVPL) projects, Minister Dharmendra Pradhan said today.

While the 2,042-km Mallavaram-Bhopal-Bhilwara via Vijaipur pipeline will cost Rs 8,086 crore, 2052-km Mehsana-Bhatinda line will cost Rs 6,864 crore and 725-km Bhatinda-Jammu-line would cost Rs 1,520 crore.

In a written reply to a question in Lok Sabha, he said regulator PNGRB has granted time extension for completion of the two projects up to December, 2017.

Prior approaching Ministry, "the Government of Gujarat had also approached the Ministry of Finance for financial support from the Asian Development Bank (ADB) for execution of MBBVPL project," he said in the reply.

The Oil Minister further said that "keeping in view the importance of this pipeline project, MoP&NG has conveyed its support to the request of Government of Gujarat for financial assistance from ADB to the Ministry of Finance in this regard."

In September, the government had agreed to partly fund a Rs 13,000 crore natural gas pipeline project that will take the fuel to Prime Minister Narendra Modi's constituency Varanasi and the eastern part of the country.

The government is providing Rs 5,176 crore or about 40 per cent of the project cost after state-owned gas utility Ltd found it difficult to commercially justify the huge investment of Rs 12,940 crore in absence of either a firm source of gas supply or customers.

The 2,539-km long pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal and also Bokaro in Jharkhand and Dhamra in Odisha will be completed by 2020.

This was the first gas pipeline project that the government decided to fund.

Besides seeking 40 per cent funding of the projects, the Gujarat government has also asked for "grant of authorisation for development of city gas distribution networks on nomination basis on the lines of support provided to GAIL for its Jagdishpur-Haldia and Bokaro-Dhamra natural gas pipeline project," Pradhan said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, November 28 2016. 14:57 IST