GAIL ejects IL&FS from Rs 270-cr pipe laying project due to 'poor' progress

GAIL CMD B C Tripathi re-affirmed the company's commitment to ensuring completion of Pradhan Mantri Urja Ganga project

State-owned gas utility GAIL India on Wednesday said it has terminated a Rs 270-crore pipe laying contract it had awarded to financially-troubled IL&FS and replaced it with another contractor. 

The contract was terminated "due to poor project progress driven on account of acute financial crisis," GAIL said in a statement here.  

GAIL had last year awarded a portion of the 2,655-km of the Pradhan Mantri Urja Ganga project to IL&FS.

The project, costing Rs 12,940 crore, originates from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, with branch lines to Bokaro in Jharkhand and Dhamra in Odisha.

IL&FS Engineering and Construction Company, a unit of the troubled IL&FS group, had won two contracts last year to lay 160 km in the Dobhi-Durgapur stretch and 100 km in the Bokaro-Angul stretch of the project.

Other contractors have the mandate for the remainder of two stretches, which are together about 850 km long. The 260-km pipeline contract to IL&FS was worth about Rs 270 crore.

"The Bokaro-Durgapur section (124 km) is now re-tendered and awarded to three different contractors to expedite construction efforts for hooking up supply network to the fertilizer, city gas distribution and other industrial consumers," GAIL said.
 

The company said the project consultant, Engineers India Ltd, was replaced by MECON for overseeing the project activities under this crucial stretch.

Phase one of the project involving laying the pipeline to Dobhi, Patna, and Barauni in Bihar, will be completed this month. The pipeline will be also extended from Barauni to Guwahati in Assam, orders for which have also been placed.

As per the earlier plan, the project was targeted at meeting the energy requirements of 40 districts and 2,600 villages covering five eastern states -- Uttar Pradesh, Bihar, Jharkhand, Odisha, and West Bengal -- by 2020. The project was launched in October 2016 and is also known as Jagdishpur-Haldia/Bokaro-Dhamra Pipeline (JHBDPL).
 

"In a swift move to safeguard project schedule of the Pradhan Mantri Urja Ganga natural gas pipeline to eastern states, GAIL as the owner and operator of the prestigious project under execution has offloaded the pipe laying contract from IL&FS due to poor project progress driven on account of acute financial crisis," the statement said.

Post commencing supplies at Varanasi, the final leg of Phase-I (Phulpur-Patna section of about 585 km) of the 2,660 km pipeline project is now closer to readiness and natural gas supply to Bihar's capital Patna is expected to commence during the second fortnight of this month, GAIL said.

GAIL Chairman and Managing Director B C Tripathi re-affirmed the company's commitment to ensuring completion of Pradhan Mantri Urja Ganga project. 
 

"Accordingly, Phase two of this project beyond Dobhi (Gaya) towards Durgapur-Haldia and Bokaro-Ranchi-Angul-Dhamra (1,900 Km) is slated for progressive completion by December 2020 whereas the 750 km pipeline from Barauni to Guwahati is expected to be operational by December 2021," it said.

The 750-km pipeline up to Guwahati will cost Rs 3,700-4,000 crore.

The project will usher in industrial development in the eastern part of India by supplying environment-friendly natural gas to fertiliser and power plants, refineries, steel plants, and other industries.

It will also provide clean energy to households and transportation in the cities en route the pipeline. The city gas network activities in Varanasi, Bhubaneswar, and Cuttack have already commenced.