Beware GAILآ’s demand for Ahmedabad gas circle

Vol 8, PW 4 (19 May 04) People & Policy

GAIL is taking its role as a city gas distribution champion seriously.

So seriously, that in the absence of a regulatory framework, it wants to take control of local gas distribution zones in Gujarat awarded under the states defunct gas policy. The NOCs (no-objection-certificate) issued by the Gujarat government are no longer valid, a GAIL official tells PETROWATCH.

On what grounds can the legality of these NOCs be proved Its best we take them over. Behind GAILs aggressive posturing is a 25th March Supreme Court ruling that quashed Gujarats attempt to control its gas sector independent of Delhi.

The Supreme Courts opinion has nullified the Gujarat Gas Act and its interim city gas distribution policy, he said. The draft petroleum regulatory board bill says city gas distribution must come under central government control.

As such GAIL argues that it should now be permitted to take control of all new city gas distribution projects in Gujarat. Worryingly, GAIL has set its sights on the Ahmedabad and Vadodra gas circles, already awarded by the Gujarat state government to the Adani Group.

GAIL is confident that any new regulator will give it the power to take over existing networks, including Ahmedabad and Vadodra. But what if the Adani Group refuses to hand over its licence First ask them on what basis they are setting up pipelines in these two cities replies GAIL.

The policy under which they won these two circles no longer exists! He adds: We won Rajkot and Bhavnagar (under the Gujarat governments defunct gas policy) but these two projects are also on hold. Gujarat Adani is unimpressed with GAILs posturing.

This is speculation, responds Sanjay Gupta, CEO of Adani Groups Infrastructure business. When there is no regulation, the particular states rules apply.

Adds Gupta: What will happen to the Surat and Ankleshwar circles (operated by BG-owned Gujarat Gas) Does GAIL want these also Since April 2003, Gujarat has awarded seven No Objection Certificates to three companies. This is like nationalisation of banks, says a source.

How far can GAIL influence takeover of any ongoing project