Not so smart PNGRB 'smart city' round collapses

Vol 20, PW 4 (03 Nov 16) People & Policy

Looks like the PNGRB wasn't being very smart when it chose 11 'smart' cities to offer under the seventh retail gas licensing round or CGD-VII.

In the end only one of the 11 cities has been awarded: Solapur in Maharashtra went to IMC which quoted a bank guarantee of Rs150cr ($23m) to beat a consortium of Hindustan Petroleum and Oil India which quoted Rs140cr ($21m) during a tie-breaker on October 20. With a population of around 1m, Solapur has the highest number of sugar factories in India at 33 and is also a major centre for the production of Indian cigarettes or 'bidis' and towels.

IMC must now submit a bank guarantee for Solapur to the Board by November 6. But the PNGRB has little to celebrate - the only other city still on offer, Davanagere in Karnataka, received no bids at all! When the round was launched on March 31 this year (2016) the following cities were also offered: Khordha in Orissa, Jabalpur in Madhya Pradesh, Vishakhapatnam in Andhra Pradesh, Coimbatore and Chennai in Tamil Nadu, Guwahati in Assam, Jaipur and Udaipur in Rajasthan and Bhopal in Madhya Pradesh.

But then the PNGRB sheepishly and with little publicity removed nine cities from its 'smart' list because potential bidders pointed out that the nearest gas pipelines were more than 50-km away making any retail gas network unviable.

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