Land acquisition problems curb Indraprastha Gas expansion

Land acquisition bottlenecks in the national capital are constraining Indraprastha Gas, the supplier and marketer of compressed natural gas (CNG) in Delhi, from opening more CNG outlets.

"Almost 80 per cent of our problems of expanding our CNG stations in Delhi are due to non-clearance of land," Indraprastha Gas Managing Director Om Narayan said.

The company, a joint venture between GAIL (India), Bharat Petroleum Corporation and the Delhi government, had planned to spend around Rs 100 crore for opening CNG dispensing stations last financial year. However, non-availability of land for the stations meant it spent only around Rs 65 crore, Narayan said.

Indraprastha Gas currently owns 153 CNG dispensing stations in the city and is planning another 10 this financial year.

The government has allotted 2 million standard cubic metres per day (mscmd) of gas to Indraprastha Gas, of which Delhi's current requirement is only 1.5 mscmd. The balance 0.5 mscmd is sufficient for the company to open 25 more CNG stations.

The company plans to increase its installed capacity by 10 per cent annually till the Commonwealth Games to be held in Delhi in 2010.

The company was installing additional compressors at existing stations to increase capacity, Narayan said. "Land acquisition problems in Delhi and non-availability of licences to expand to Noida and Gurgaon are our major concerns at the moment," Narayan said.

The Delhi government has set up a committee under the principal secretary, buildings and lands, to look into the land allotment issue.

Indraprastha Gas wants to diversify into Greater Noida by opening two CNG dispensing stations and supplying natural gas to 1,500 households in this financial year.

"The problem is, we do not have the licence to go into Noida. We feel there should be a natural progression from Delhi to Noida to Greater Noida," Narayan said.

The Adani group bagged the licence to set up CNG dispensing stations in Noida almost a year back.

"As Noida does not have any CNG stations, vehicles from Noida come to Delhi for their CNG, which congests Delhi's stations," Narayan said.

Indraprastha Gas has received the licence to set up CNG stations in Sonepat. "Our aim is to set up a couple of CNG stations in Sonepat by the end of this financial year," Narayan said.

The company's planned investment of Rs 170 crore this financial year is double the Rs 65 crore it spent in 2006-07. Of the Rs 170 crore, around Rs 34 crore will be spent on the expansion into Greater Noida.

The entire planned capital expenditure will be funded by the company through its internal generation. "We do not have any debts on our books," Narayan said.

The company also plans to add 70,000 piped gas users in Delhi. Currently 80,000 households in the capital use piped gas in their kitchens.