PNGRB rejects Adani's CGD network applications

Armed with a Supreme Court order to process pending applications, the Petroleum and Natural Gas Regulatory Board (PNGRB) today rejected Adani Group’s applications for setting up city gas distribution (CGD) network in Jaipur and Udaipur.

The board also accused Adani Gas, an arm of Adani Enterprise, of violating its directions by going ahead with construction at both Jaipur and Udaipur despite its instructions in October 2007 to stop all incremental activity.

Adani Gas had applied for grant of authorisation for CGD network in both cities in August 2008. It owns and operates CGD network in Ahmedabad and Vadodara in Gujarat and Faridabad in Haryana. It is also working to develop such network in Noida, Lucknow and Khurja in Uttar Pradesh. CGD includes supply of compressed natural gas as auto fuel and piped natural gas for domestic, commercial and industrial use. A company spokesperson declined to comment on the development.

The board had earlier informed the company that the information submitted was not enough to substantiate its claim for authorisation. Accordingly, a hearing was given to the company in August last year.

After the hearing, the board said the company did not satisfy the conditions laid under Regulation 18(1) of the PNGRB Act. Under the regulation, the company should have achieved 25 per cent of physical and financial progress before the notification of the Act. “Physical and financial progress achieved by Adani Gas before the appointed day (October 1, 2007 - the day PNGRB Act was notified) in Jaipur and Udaipur does not satisfy the proviso 18 (2) (d) of the PNGRB Regulations,” the board said in a letter to Adani Gas today.

All companies that were laying such city gas networks (after licences from the government) at the time when the board came into force, are required to obtain an authorisation from the PNGRB. The board has the right to reject such applications, if an entity fails to meet the stipulated criteria.