No discrimination against Andhra Pradesh: ministry

Vol 11, PW 10 (20 Sep 07) People & Policy

Talk to the oil ministry in Delhi and it strongly denies it is unfairly blocking approval for a KGNL gas transmission network in Andhra Pradesh.

“KGNL does not have a firm gas tie-up,â€‌ stresses an oil ministry source. “It says it has a (gas sourcing) tie-up with GSPC but GSPC’s gas reserves have yet to be validated and certified by the DGH.

â€‌ Nor is Delhi actively promoting GAIL. “Why would we deny permission to KGNL once a policy is in placeâ€‌ adds the ministry.

“What have we got against AP or any state We have to look at the policy and the overall picture. GAIL has received permission because it has shown a firm gas source tie-up.

â€‌ On a joint visit to Hyderabad with Prime Minister Manmohan Singh on July 30, finance minister Palaniappan Chidamabaram, clearly overstepping his brief, reportedly told state authorities the government of India would not object to a proposed gas grid if the state invested its own money. Not so, argues the oil ministry: investing your own money is not enough.

“There has to be a firm gas source,â€‌ the ministry tells us. “Otherwise you will have lots of investors without any gas source.

â€‌ Two things could happen, it argues. First, companies that have sunk investments on the ground could use it to trade with people who come in later with gas.

Second, with several pipeline players and no gas, farmers and landowners will suffer unnecessary inconvenience as multiple pipelines are laid across land. “Granting permission to lay a gas transmission network is not straightforward,â€‌ says the ministry.

“It is not as simple as saying â€کit is my money, let me develop my state.’â€‌ Ministry officials say the new downstream and gas regulator will decide on the viability of future transmission pipelines.

In Hyderabad, however, this gets a poor response. “The state government is racing against time,â€‌ we hear.

“It wants part of the grid ready by June 2008 when D6 gas will land. Andhra wants to show investors that it is a major gas destination.