Cautious Krishnan cancels CGD licensing round

Vol 15, PW 11 (01 Dec 11) People & Policy
     

India’s new gas regulator S.

Krishnan might think extreme caution avoids controversy, but his strategy will make gas retailers extremely unhappy. Krishnan cancelled India’s fourth retail gas licensing round on November 4, concerned that companies might have submitted unrealistically low bids for the eight cities on offer.

“There are definitely some problems with the CGD bidding rounds,” Krishnan tells this report. “We need to examine the regulations more closely and fix ‘loopholes’ allowing companies to win with unrealistic bids.

” Krishnan wants to cancel the third city gas licensing round too, but finds this more challenging as technical bids in that round were opened on February 18 for seven cities on offer. “It was easier to cancel the fourth round as bids were not yet opened,” he explains.

“Cancelling the third round may invite ‘legal complications’ but we cannot allow it to continue either.” Krishnan wants to avoid making a decision on the third round before January 1, 2012 when KK Jha is expected to step into the vacant member (infrastructure) post at the PNGRB.

Another matter Krishnan is unwilling to decide alone is whether ‘geographical areas’ offered in retail gas licensing rounds refer only to cities or surrounding rural areas too. “What’s the hurry” wonders Krishnan.

“Why not wait till the member infrastructure joins and gives his opinion (on the third round)” More, in the next three weeks, PK Bishnoi is expected to step into the vacant member (tariff) post. Bishnoi’s file secured CVC clearance on November 17 and was forwarded by the oil ministry to the high-powered Appointments Committee of Cabinet on November 21.

Former fertiliser secretary Krishnan stepped into the PNGRB chairman’s role on October 18.

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