IndianOil-Adani wins CNG rights
New Delhi   11-Aug-2009
The Petroleum and Natural Gas Regulatory Board (PN-GRB) had asked the companies to quote only the tariff that they will charge for transporting gas within the perimeters of a city and left the final selling price of the fuel for the companies to decide. This provision of 'zero' tariff, sources said, is made up by companies through CNG charges levied from users household or industries as they deem fit. Industry sources said PN-GRB today opened price bids for two cities to discover that IndianOil-Adani combine had quoted zero pipeline tariff for 25 years in Chandigarh and the same for 7 years in Allahabad. On top of this, the PNGRB has also allowed a 5-year marketing exclusivity to the winning company. Even after 5 years, the operator like IndianOil-Adani will have system (that is pipeline) exclusivity for 25 years, meaning no other company can lay a pipeline network and would have to necessarily request them to use their network if they want to retail CNG to automobiles and piped gas. But the regulations do not specify the extra capacity the operators would have to create in the system for usage by others and so third parties can be turned down on pretext of no capacity, they added. Sources said in Allahabad, the IndianOil-Adani joint venture was in a direct fight with GAIL Gas Ltd, the city gas subsidiary of state gas utility GAIL India Ltd. Chandigarh saw a four-cornered contest among IndianOil-Adani, HPCL, GAIL Gas and GSPC Gas. The other bidding criteria was the length of pipeline a company proposes to lay in the city and the number of consumers they propose to sell the gas to. In some cases, companies have indicated enrolling consumers even more than the population in that area, again making a mockery of PNGRB's regulations, they added. Along with Chandigarh and Allahabad, Jhansi, Shahdol and Yanam had also been put on auction but had received single bids GAIL Gas for Jhansi and Reliance Gas, a unit of Reliance Industries for Shahdol and Yanam. Owing to the single bids, PNGRB had extended the bid deadline by a month for these cities but only Avantika Gas made a bid for Shahdol. In all, seven cities were put on auction, the other two being Ghaziabad and Rajahmundry, the bids for which are likely to be opened on August 13. Ghaziabad had witnessed the fiercest competition, with IndianOil-Adani, HPCL, GAIL Gas, IGL, Siti Energy and GSPC Gas in the fray. Rajahmundry has IndianOil-Adani, Reliance Gas and Bhagyanagar Gas Ltd contesting, they added.