Modi revives dormant Haldia-Phulpur gas pipeline

Vol 18, PW 5 (23 Oct 14) Midstream & Downstream

When it comes to ensuring electoral victory Prime Minister Narendra Modi will stop at nothing, even if this means handing over five cities on a silver platter to GAIL without the bother of competitive bidding.

Modi’s strategy is simple: revive poverty-stricken northern and eastern India so his ruling BJP can reap the dividend from state elections in Jharkhand later this year, Bihar in November next year (2015) and Uttar Pradesh in 2017. How has he done this? By directing the oil ministry to offer CNG and piped gas marketing rights to GAIL for Banaras (Varanasi) in Uttar Pradesh, Patna and Gaya in Bihar and Ranchi and Jamshedpur in Jharkhand.

“The PMO told the oil ministry to use its sovereign authority and allocate these five cities to GAIL without delay,” confirms a ministry source. Modi has gone a step further and pulled out of cold storage an old GAIL proposal to lay a 2050-km pipeline from Haldia in West Bengal to Phulpur in Uttar Pradesh in a move calculated to boost his popularity in these three politically crucial states.

But GAIL chairman BC Tripathi, in a meeting with oil secretary Saurabh Chandra on October 5, said the pipeline is unviable unless GAIL has ‘anchor’ customers along the route, which it does not. “The ministry then decided to give the five cities to GAIL,” reports a source.

“They all sit on the pipeline route.”