PNGRB to open bids for CNG licences in Ghaziabad

Going ahead with the bidding process for city gas distribution in Ghaziabad, oil regulator PNGRB will open price bids next week, but will stop short of issuing final licences following a Delhi Court order restraining it from doing so.

According to sources, IOC-Adani combine are the favourites for the bid.

The regulator, Petroleum and Natural Gas Regulatory Board, on September 18 sent e-mails to all the six bidders for Ghaziabad informing them that price bids would be opened on September 22 at 1100 hrs.

Earlier, Indraprastha Gas had challenged PNGRB's authority to award licences as Government had not notified the relevant section of the the PNGRB Act.

In an interim order, on August 18, Chief Justice Manmohan J of Delhi High Court directed IGL, which had claimed that it was authorised by the Government for retailing CNG to automobiles and piped gas to industrial units in Ghaziabad, to continue sales from its existing stations in Ghaziabad.

The Delhi High Court had also restrained PNGRB from issuing licences for any of the seven cities it had called bids for. In its August 3 order on Ghaziabad, the Court said: "The learned counsel of the Respondent No. 1 (PNGRB) has stated that as of now they are only evaluating the bids."

When contacted PNGRB Chairman L Mansingh said: "We had not given any undertaking to the court (of not opening the price bid) and we are complying with the court order (of not issuing Letter of Intents or licences)."

However, opening of the bids flies in the face of PNGRB's own regulation that give a company five-year exclusivity or monopoly in CNG and piped gas retailing in a city. Once Delhi High Court had allowed IGL for Ghaziabad, the regulations left no scope for any other firm.

Asked about the Delhi High Court order, Mansingh said, "It is an interim direction."

Sources said besides the Indian Oil Corp (IOC) and Adani Energy combine, others who had bid for Ghaziabad, include Gujarat government firm GSPC Gas, GAIL Gas--a subsidiary of state gas utility GAIL India, Hindustan Petroleum, IGL and Sity Energy.

The IOC-Adani combine is being touted as favourite for Ghaziabad as it had previously bagged rights for Chandigarh and Allahabad using loopholes in PNGRB's bidding criteria to quote zero pipeline tariff.

PNGRB had asked companies to quote only the tariffs they will charge for transporting gas within the boundaries of the city and left the price at which they will sell the gas to consumers at their discretion.

This allowed firms like IOC- Adani to quote "zero" tariff and making good of the cost by charging consumers higher CNG and gas prices.

IOC-Adani combine had quoted zero tariffs for 25 years in Chandigarh and seven years in Allahabad.