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Gas retailing bids: RIL-BP JV abstains, IGL seeks licence for 13 cities

Press Trust of India  |  New Delhi 

The Reliance-joint venture today came close to bidding for licence to in 15 cities but did not place a firm bid, while put in bids for 13 cities.

Bidding for the biggest distribution licensing round, offering 86 permits for selling CNG and piped cooking gas in 174 districts in 22 states and union territories, closes this evening.

-- the 50:50 JV of UK's plc and Reliance Industries, is making its maiden foray in distribution as it looked at putting in bid for 15 cities, but dropped out at the last moment, sources said.

IGL, which retails CNG in the national capital region, is putting in bids for 13 cities, they said.

has put in a total of seven bids.

As many as 86 geographical areas (GAs), made by clubbing adjacent districts, are on offer in the 9th distribution (CGD) bidding round.

The GAs cover 24 per cent of the country's area and 29 per cent of its population.

The round is likely to attract investments of Rs 70,000 crore, according to the Regulatory Board (PNGRB).

The government is targeting to raise the share of in primary to 15 per cent from 6 per cent at present, within a few years.

The bid round is also aimed at Narendra Modi's target of giving piped cooking to 1 crore households, roughly triple the current size, by 2020.

The CGD licences on offer are for in Madhya Pradesh; Ahmednagar in Maharashtra; and in Punjab; Barmer, Alwar and Kota in Rajasthan; and Salem in Tamil Nadu; Allahabad, Faizabad, Amethi and in Uttar Pradesh; Dehradun in Uttarakhand and Burdwan in

Prior to the 9th round, 91 GAs were awarded to firms like and GAIL Gas Ltd, which are serving 240 million population, 42 lakh domestic consumers and 31 lakh CNG vehicles.

Of these, 56 GAs were awarded through bidding rounds and the rest on government nomination.

The bid round is being held on changed parameters after one paisa bids spoilt the initial auction rounds.

Bidders have been asked to quote the number of CNG stations to be set up and number of domestic cooking to be given in the first eight years of operation.

In the previous eight rounds, bidders were asked to quote only the tariff for the pipeline that carries gas within the city limits. These bidding criteria did not include the rate at which an entity would sell CNG to automobiles or piped to households using the same pipeline network, leading to companies offering one paisa as the tariff to win licences.

In the new guidelines, maximum weightage of 50 per cent has been given to the number of piped proposed in eight years from the date of authorisation, as compared to 30 per cent earlier.

The number of CNG dispensing stations proposed to be set up has been assigned 20 per cent weightage. Length of the pipeline to be laid in the GA and the tariff proposed for city gas and Compressed Natural Gas (CNG) have been assigned 10 per cent weightage each.

Also, a floor tariff of Rs 30 for city gas and Rs 2 per kg for CNG has been put in order to deter bidders from quoting unviable tariff of 1 paisa per unit.

Companies having a net worth of not less than Rs 150 crore can bid for cities with a population of 50 lakh and more while the same for cities with population of 20 lakh to 50 lakh has been proposed at Rs 100 crore.

The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for cities that have less than 10 lakh population.

Last few rounds of CGD have evoked a lukewarm response. The fourth round was altogether cancelled, while the fifth saw a sparse response.

The sixth round of bidding for 34 cities in 2015 got bids for only 20. The seventh round of bidding done to set up CGD infrastructure in 11 smart cities under smart city mission received only 1 bid.

Seven cities were offered in the 8th round last year but not all cities have been awarded so far.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 18:40 IST