Dankuni Complex, Calcutta Gas Supply Corp Lock Horns

Coal Indias Dankuni coal gas plant has threatened to dole out an irregular supply of gas to the Greater Calcutta Gas Supply Corporation (GCGSC) unless the latter agrees to pay a higher rate. In retaliation, the GCGSC has threatened to stop coal gas supply from Dankuni to the Alloy steel plant at Durgapur.

Any major disruption in gas supply will precipitate serious industrial unrest in units dependent on the coal gas supply as the GCGSC is at present supplying about 1.5 lakh cubic meters of gas a day against the demand for two lakh cubic meters. The daily gas production capacity at the coal carbonisation plant at Dankuni is seven lakh cubic meters a day.

 

The Dankuni Coal Complex (DCC) which is under the South Eastern Coalfields Ltd (SECL), a CIL subsidiary maintains that it has been running up monthly losses of Rs 3 crore. The main reason for this is attributed to the low price of gas sold to GCGSC, a West Bengal government company.

As against Rs 9.50 for each therm of gas paid by the GCGSC, the Alloy steel plant (ASP) in Durgapur is shelling out Rs 15.50 a therm. The DCC has been insisting that the same rate should apply to the GCGSC too.

The other bone of contention between the two is GCGSCs recent move of adjusting Rs 12.12 lakh against gas bills of the period December, 1996, to February, 1997, claiming that the gas meter reading was faulty.

The GCGSC may be under greater pressure since the DCC has an alternate consumer of gas, the ASP which pays a much higher rate. The GCGSC threat may stem from the fact that it has a legal method to stop the flow of gas to the ASP in Durgapur. Under the agreement between DCC and GCGSC, the entire production of gas is to be distributed by the GCGSC. However, as the corporation was not finding enough demand for the gas around Calcutta and there was a sudden demand for gas from the ASP, it was mutually agreed to allow the flow of surplus gas to ASP.

In view of an already present dispute with the ASP and the Durgapur Projects Limited (DPL) the original owner of the Dankuni-Durgapur gas pipeline over the metering arrangement of gas flow to the ASP, the GCGSC is now threatening to deny the right of way of routing the gas to the ASP.

The DCC, which was earlier directly handled by CIL, was put under SECL about a year back with its headquarters at Bilashpur. The move is believed to have been made in the interests of better tax planning as the DCC, with its perennially loss making, could help reduce the tax burden of the cash-rich SECL.

The DCC started supplying gas to the GCGSC in 1990 at a rate of Rs 7.50 a therm. The price was raised to Rs 8.50 since August, 1996. The corporations average price realisation from its 530 industrial and commercial consumers, and about 6,000 domestic consumers is Rs 12 a therm. The corporation has an accumulated loss of about Rs 20 crore with an annual average of Rs 3 crore.