PNGRB not to slow down city gas distribution bidding

With an aim to cover 200 cities by 2015, downstream oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has decided not to slow down the pace of city gas distribution (CGD) bidding though it cannot grant authorisation as per an interim order of the Supreme Court.

“We are concluding the third round of CGD bidding on February 18. The fourth round will also conclude on March 30. Thereafter, we will organise a round every two-three months. While the case is underway, we wish to be ready so that we can grant authorisation as and when the judgment comes,” said a Board official.

The third round in which bids were invited for installing and running a CGD network in Asansol-Durgapur (in West Bengal), Bhavnagar, Gandhidham-Anjar, Bhuj-Mundra and Jamnagar (all in Gujarat), Ludhiana and Jalandhar (in Punjab) and Panipat (in Haryana) will conclude on February 18. In the fourth round, bids have been invited for Ernakulam (in Kerala), Rangareddy, Medak, Nalgonda and Khammam (all in Andhra Pradesh), Alibag/Pen, Lonavla/Khopoli (in Maharashtra), Guna (in Madhya Pradesh) and Shahjahanpur (in Uttar Pradesh).

In the first round, completed in early 2009, the Board had invited bids for six cities — Kakinada in Andhra Pradesh, Mathura and Meerut in Uttar Pradesh, Kota in Rajasthan, Dewas in Madhya Pradesh and Sonepat in Haryana. GAIL Gas, a subsidiary of GAIL India, and Bhagyanagar Gas Ltd, a joint venture of GAIL India, had won the CGD rights in bids for five of the six cities. Another company, Saumya-DSM Infratech, had bagged CGD rights for Mathura.

The high court had struck down the board’s power to issue an authorisation for CGD business and the ministry went ahead to authorise IGL for Ghaziabad. In July last year, the legal lacuna was rectified, with a section of the PNGRB Act finally notified, and the Board now has all the powers to conduct CGD bidding.

Bids were invited for seven cities in the second round — Allahabad, Ghaziabad and Jhansi in Uttar Pradesh, Shahdol (Madhya Pradesh), Rajahmundry and Yanam (Andhra Pradesh) and Chandigarh. However, this round got stuck in a legal tussle between Indraprastha Gas Ltd (IGL) and the board on CGD rights for Ghaziabad. IGL, which was keen to enter the CGD business in Ghaziabad, approached the Delhi high court, claiming the board had no powers to conduct CGD bidding.

The High Court’s decision was challenged by Board at apex court. The March 15 (2010) interim order of the Supreme Court had said the Board can only process pending applications, but it cannot pass final orders. The matter is now at the Supreme Court.