Adani NOC for Lucknow needs regulator's approval

Vol 11, PW 21 (06 Mar 08) Midstream & Downstream

Adani Energy has a long way to go before it can resume work on its City Gas Distribution (CGD) business in Lucknow and Khurja, despite a surprise decision by Uttar Pradesh state authorities to re-issue the company with another No Objection Certificate (NOC).

Contacted by this report, the downstream and gas regulator’s office is clear. “After October 1, 2007 (when the regulator’s office formally came into being) state governments no longer have the power to authorise companies to set up CGD networks,â€‌ we hear.

“Adani Energy still needs formal authorisation from us (the regulatory Board).â€‌ On February 28, UP authorities capped a remarkable few months in their relationship with Gujarat-based Adani Group when Sudhir Bobde, Managing Director, UP State Industrial Development Corporation, issued a conditional NoC addressed to Adani Group chairman Gautam Adani, “for development of a gas distribution network in Khurja and Lucknow.

â€‌ Bobde’s NoC is all the more remarkable given that just 10 months earlier the government he represents stripped Adani of its original NoC for Lucknow. Does the new NOC mean anything “State governments can issue Right of User permission for pipelines and also define the geographical area for the network,â€‌ stresses a Board source.

“But they can not grant authorisation. That power rests with us.

â€‌ To be fair, UP’s decision to re-issue the NOC to the Adani Group, recognises the power of the new regulator. In the letter, Bobde writes that state authorities decided on January 31 to award the NOC to Adani Energy for four months, beginning February 2 this year.

Crucially, Bobde stresses that the fresh NOC is subject to approvals from the regulatory Board and the Supreme Court, where Adani is fighting GAIL for access to gas from the HBJ. “We will approach the Regulator with the NOC for authorisation,â€‌ confirms Adani Energy.

“We fulfil most of the eligibility criteria for â€کdeemed authorisation’ but the only hurdle we face is securing a gas supply commitment.â€‌