Impossible CGD targets pile pressure on GAIL

Vol 22, PW 8 (07 Feb 19) Midstream & Downstream

Narendra Modi's plan to provide 70% of India's population with piped gas in the next three years sounds good on paper but in reality GAIL and its joint ventures are struggling to meet their near impossible CGD targets.

A GAIL source confirms the company's two largest city gas joint ventures Mahanagar Gas (MGL) and Indraprastha Gas (IGL) are unlikely to meet their targets to provide piped gas connections to homes this fiscal (2018-19). Each was meant to connect 300,000 homes but Mumbai-based MGL managed to connect only 119,568 homes by January 1 this year leaving a shortfall of 180,432 while IGL connected 136,794 homes by January leaving a shortfall of 163,206.

This means MGL needs to connect 2005 homes every day until March 31 (2019) to meet this year's target or 60,144 every month while IGL must connect 1813 homes every day or 54,402 every month until March 31 (2019) to meet its goals. "These targets are not only difficult to achieve," adds our GAIL source.

"They're impossible!" He adds the unfulfilled targets of all GAIL's joint ventures will be carried forward into the next fiscal (2019-20). "If 2018-19 was bad then next year will be worse," he says.

Even bleaker is the outlook for Bhagyanagar Gas, GAIL's Hyderabad-based joint venture with HPCL, which has only managed to connect 7754 new homes from its 75,000 target for 2018-19 - around 10%.