GAIL loses APTEL appeal against PNGRB fine

Vol 21, PW 4 (16 Nov 17) Midstream & Downstream

India's Appellate Tribunal for Electricity (APTEL) has sent out a strong signal to city gas retailers: meet your PNGRB milestones or face the consequences! On November 3, 2017 Delhi-based APTEL struck down GAIL Gas's appeal against the PNGRB's order dated November 23, 2015 invoking 25% of the Rs3cr ($451,000) bank guarantee for Firozabad under the Taj Trapezium Zone, which works out to Rs75 lakhs ($114,465).

GAIL Gas had filed the appeal with APTEL in March 2016. But APTEL chairperson Ranjana Desai and BN Talukdar member (technical) in a 76-page ruling said: "Based on all the discussions and considering the relevant sections of the PNGRB Act, 2006 along with other judgments, we find no substance in the appeal." GAIL had received PNGRB authorisation for the Taj Trapezium Zone which holds the iconic Taj Mahal on September 26, 2011.

But the PNGRB argued to APTEL that within three years of that date GAIL had only connected 160 homes to its Firozabad piped gas network against a target to connect 24,000 homes. GAIL Gas only managed to lay 526.57-km of steel pipeline against a target of 1010-km and could set up a cumulative CNG compression capacity of just 18,460-kg against a target of 92,260kg.

"GAIL Gas clearly violated the terms and conditions of authorisation," argued the PNGRB. Further the PNGRB shot down GAIL Gas's argument that it had violated natural justice by encashing the guarantee.