Rajasthan examining options for CGD network

Vol 9, PW 21 (09 Feb 06) Midstream & Downstream

Rajasthan will soon decide on proposals from several companies to construct city gas distribution networks across the desert state.

We have looked at all the options and the draft report is ready, says a source in Jaipur. The draft report will be converted into a final report in a week and handed to the government.

Once the report is ready, the government will decide whether to go ahead and award no objection certificates for the construction of CGD networks. Rajasthan could also decide not to do anything by itself and leave the entire CGD business in the state to the government of India, thereby not antagonising GAIL which opposes private players.

If Rajasthan chooses the first option, it must set up a panel of bureaucrats with powers to select companies or consortia. Rajasthan might also set up its own gas transmission company like Gujarat and Maharashtra, Transmission of gas to the city gate is a concern that was raised by almost all the companies who sent in proposals and made presentations, we hear.

But setting up a transmission company is only a first step towards the states ambition to build a gas-based economy, in the interests of sustainability and environmental friendliness. Several critical issues need to be looked at before any decision.

Will CGD licences be exclusive If the licences are non-exclusive nobody will come, we hear. But if they are exclusive how do we ensure that these companies do not just take the licences and sit on them Rajasthan could emulate neighbour Gujarat.

But Gujarat has gas unlike us. Another issue relates to the availability and price of gas.

Where in the country is non-APM (market price) gas sold to CGD networks we are asked. If we have to sell non-APM gas in Rajasthan who will pay for it Also, why should only some cities get APM gas Today were in a situation where supplies of APM gas are dwindling.

If the government of India wants to control distribution of APM gas let them set up the CGD networks.