IndianOil abandons CGD-IX fight against PNGRB

Vol 21, PW 26 (04 Oct 18) People & Policy

In a surprise move, IndianOil has dropped its challenge against the PNGRB over its disqualification for the Satna and Shahdol region of Madhya Pradesh, most likely at the behest of the oil ministry.

As reported in our September 20, 2018 edition IOC had filed a case with the Apellate Tribunal for Electricity (APTEL) against the gas regulator's decision. Other CGD retailers were keenly watching the outcome of this case to see how the PNGRB would distance itself from an internal memo allegedly prepared on July 26 - two weeks after receiving bids - that any company offering gas connections to less than 2% or more than 100% of homes in an area should be categorised as an "unreasonable" bid.

PNGRB lawyers asked for more time to submit an affidavit demanded by the court by September 20 explaining why IOC was not declared the successful bidder despite scoring highest. But on September 20 IOC lawyer (Ms) Rimali Batra informed APTEL that, "she has been instructed by the appellant (IOC) to withdraw the appeal."

APTEL chairperson Justice (Ms) Manjula Chellur and technical member BN Talukdar ruled: "Permission is granted; (APTEL) registry is directed to number the appeal; the appeal is dismissed as withdrawn." IOC is believed to have been pressurised by the ministry on behalf of the PNGRB to avoid embarrassing questions on how and why it introduced criteria for "unreasonable" bids after companies had submitted bids.

Contacted for a comment, a senior IOC source said: "We decided to withdraw because we are a government company. (Winner and second ranked BPCL gas subsidiary) Bharat Gas Resources is also a government company and the PNGRB is a government body. When all involved are government bodies we saw no sense in our appeal." He also argued that Satna and Shahdol is a "very small area and does not have very high (gas business) potential." If the area in dispute had been a high potential area like Chennai, he said, it might have been a different matter. Our source declined to comment on whether the ministry had directed IOC to withdraw the appeal against the PNGRB. He did however contend that disqualifying IOC's bid for being "unreasonably low" was unfair as the criteria for unreasonably low bids was not in the bidding document. If it had been included, he said, IOC would have prepared its bid with this threshold in mind. Nonetheless he stressed that IOC has reaped a 'reasonably good harvest' from CGD-IX. "On our own we won seven areas," we said. "And with Adani we won nine."

IndianOil abandons CGD-IX fight against PNGRB

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