SC notice to PNGRB over pipeline project to GSPL-led consortium

The Supreme Court has issued notice to Petroleum and Natural Gas Regulatory Board (PNGRB) while admitting an appeal of GAIL (India) Limited challenging the award of Rs 7,000-crore Mallavaram-Bhilwara-Vijaipur gas pipeline project to a consortium led by state-run Gujarat State Petronet Limited (GSPL).

A bench headed by Justice TS Thakur on Monday, however, declined to grant stay on the work of the over 1,500 km long pipeline project.

It also sought response on GAIL's petition from the respondents including PNGRB, GSPL-led consortium members, Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.

The court was hearing a petition filed by GAIL challenging the order of the Appellate Tribunal for Electricity, rejecting petitioner's objection to PNGRB’s decision to accept the technical bid of the GSPL led consortium for laying out the pipeline for transportation of natural gas. GSPL had bid the lowest for the project in 2010.

GAIL has contended that subsequent to the bids being submitted by aspirants, the Petroleum Board had altered conditions which was illegal. However, it had failed to obtain a favourable order from the tribunal in February this year. Following which GAIL approached the Apex Court.

The project which was awarded to GSPL early this month, involves development of natural gas pipelines from Mallawaram (Andhra Pradesh) to Bhilwara (Rajasthan) and Vijaipur (Madhya Pradesh) via Bhopal (Madhya Pradesh) spanning a distance of approximately 1585 Kms with a design capacity of at least 30 MMSCMD. GSPL India Transco Ltd (GITL), a joint venture between GSPL and three public sector oil marketing companies, IOCL, BPCL and HPCL has already entered into an agreement with a consortium of 14 banks led by Bank of India for a syndicated loan of Rs 5,080 crore for the project.

The total cost of the project is about Rs 7,255 crore, of which Rs 2175 crore will be raised through equity infusion by the JV partners, while the rest will be GSPL holds 52 per cent stake, IOC has 26 per cent, while BPCL and HPCL hold 11 per cent each in the JV.

The JV company, GITL had emerged as the lowest bidder for the project in 2010.