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| DSM beats GAIL to bag Mathura city gas supply right |
| Press Trust of India / New Delhi May 05, 2009, 18:21 IST |
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Little-known DSM Infratech has beaten state-run GAIL India to bag the right to retail CNG to automobiles and piped cooking gas to households in Mathura in an auction process that has raised several eyebrows.
GAIL Gas, a unit of GAIL, was the sole bidder for city gas distribution project in Mathura when bids for six cities closed in March. But Petroleum and Natural Gas Regulatory Board (PNGRB) extended bid date for Mathura by one month.
DSM, with no experience in gas business, submitted an astonishingly low pipeline tariff to beat GAIL, which was not given an opportunity to revise its previous bid, sources said.
For the first five years - the monopoly period for the operator, DSM bid Rs 0.10 per million British thermal unit as the pipeline transportation tariff. GAIL had quoted over Rs 5 in the bid that was submitted in March, they said.
From sixth year, DSM says it will charge Rs 10, raising doubts that the company had under-bid the pipeline tariff so as to make up for under-pricing the gas transportation charge by pricing CNG and piped gas at higher prices.
PNGRB's selection criteria only prescribed for bidding for pipeline transportation tariff and not the final gas price, which some say should have been the end where competition would have ensured benefit to the consumers.
GAIL has raised doubts over the entire bidding process and has approached the Appellate Tribunal, saying the methodology adopted by PNGRB was not in conformity with CAG guidelines for bidding.
According to CAG, if bid deadline is extended, companies have the right to revise their price bid.
The Tribunal is likely to hear GAIL plea tomorrow, sources said.
In March, GAIL Gas had emerged top bidder to win retailing rights for Kota and Dewas. Bhagyanagar Gas Ltd, an equal joint venture of GAIL and Hindustan Petroleum, got Kakinada. GAIL also got Meerut in Uttar Pradesh and Sonepat in Haryana.
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