Good news and bad for all future CGD rounds

Vol 21, PW 4 (16 Nov 17) People & Policy

There's good news and bad news for gas retailers as they wait for the PNGRB to launch its ninth retail licensing round, possibly by mid-2018.

First the good news: a six-member committee set up to make changes to the bidding terms is thinking of doubling marketing exclusivity from five to ten years. This means retailers will have more time to develop their CGD projects without fear of competition.

"For a city gas retailer," says a source, "five years is too short." Now the bad news: the committee is making bidding criteria stricter to discourage non-serious companies, inexperienced newcomers and small-time amateurs. "We are mainly changing the technical and financial eligibility criteria," says a committee member.

One major change is that any eligible bidder will need at least five technically qualified people on its payroll, with at least five years experience designing and building a steel oil and gas pipeline network, including getting right of way and pre-commissioning. They must also have five years experience in pipelines operations and maintenance.

More, the net worth requirement will be increased for bidders. Example: for an area with a population of 2.5 to 5m, bidders will need a minimum combined net worth of Rs150cr ($23m), increased from Rs100cr ($15m).

Areas with a population over 5m are likely to require a net worth of Rs200cr ($30m), raised from the present Rs150cr.