More criticism of proposed GAIL monopoly powers

Vol 7, PW 18 (19 Nov 03) People & Policy

GSPC is in a combative mood with Delhi over its decision to override the state governments Gujarat Gas Act with new gas pipeline legislation.

With a direct reference to the ongoing Supreme Court battle over the Acts legality, GSPC wants the draft policy to exclude existing Acts on the subject. Care should be taken and the extent of the policy should be defined so that an administrative order or policy does not override various Central Acts on the subject as well as State Acts of West Bengal, Maharashtra and Gujarat.

GSPC vehemently opposes the draft policys suggestion that all trunk pipelines for multi-state gas transportation should be built or managed by a company selected by the oil ministry and approved by GAIL. Our pipeline is like the blood circulation system of a body, says a top GSPC official.

This will cut our veins and kill us. Adds GSPC: This provision gives monopoly rights to GAIL and fails to recognise the pipelines of Reliance, Gujarat State Petronet and Gujarat Gas.

GSPC also asks Delhi to clearly define ambiguous terms in the draft like: distribution, distribution undertaking and interconnected systems. Since the policy is of national significance it may bring more clarity if pipelines are distinguished as cross-border pipelines, inter-state pipelines and intra-state pipelines rather than transmission and distribution pipelines.

GSPC wants a clear commitment from Delhi that it will encourage investments from the private sector and not just from state-owned oil and gas companies like GAIL. The letter points out that the state government welcomes provisions of common carrier and non-discriminatory third party access to pipelines but that the oil ministry has failed to recognise GSPL as Indias first common carrier.

GSPL is the first common carrier pipeline in the country, reads the note. GAIL, even as of date, is not a common carrier.

(To read more of GSPCs objections go to: 21-GSPC critical of Delhis plan for gas regulator)