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| Few takers for CGD in smaller cities |
| Ajay Modi / New Delhi Aug 03, 2009, 00:51 IST |
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Companies look for favourable consumer mix.
Bidding for the city gas distribution (CGD) business in smaller cities like Mathura and Jhansi is getting a lukewarm response from companies, as compared to cities like Chandigarh and Ghaziabad.
In the first round of bidding for six cities that took place earlier this year, only one company (GAIL Gas) bid for Mathura. Following this, the Petroleum & Natural Gas Regulatory Board (PNGRB) had to extend the time frame by a month. Even then, only one more bid came.
In the ongoing second round for seven cities, three of the smaller ones — Jhansi (UP), Shahdol (MP) and Yanam (near Kakinada in AP) got only a bid each. Even after extending the period by a month, only Jhansi got a second bidder. However, the response for the other four, more prominent, cities — Chandigarh, Ghaziabad, Rajahmundry and Allahabad - has been good.
“Companies would be interested in CGD business for those cities which have a favourable consumer mix, that is, good industrial and transport load. Jhansi, for example, received a single bid in the first round because it has no industrial cluster,” said Rakesh Jain, general manager (energy division) at Feedback Ventures.
“We have got a good response for four cities in the second phase. Cities like Chandigarh and Ghaziabad have got a good response. By extending the bid period for another month in case of those cities where only one bid gets submitted, we try our best to ensure that there is fair competition. But if no more bids come, we cannot deprive a city from city gas facilities,” said a PNGRB official.
PNGRB has so far issued authorisation letters for city gas projects in six cities - Dewas (MP), Kakinada (AP), Kota (Rajasthan), Mathura and Meerut (UP) and Sonepat (Haryana). Companies with interest in the CGD business are GAIL Gas, Indraprastha Gas, Reliance Gas, IOC-Adani, GSPC and HPCL. The Board expects the city gas distribution network to spread to 100 cities by the end of the Eleventh Five-Year Plan (2012). It typically takes Rs 400 crore to roll out gas distribution network in a city.
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