Gas regulator to pursue SC case over govt decision on IGL’s authorisation for gas distribution.
The Petroleum and Natural Gas Regulatory Board (PNGRB) and the government are headed for another round of confrontation, even after the notification of Section 16 of the PNGRB Act.
The notification, which was issued last week, empowered the downstream oil regulator to issue authorisation for city gas distribution (CGD) licences, but the board is keen to pursue its case in the Supreme Court, challenging the authorisation granted to Indraprastha Gas Ltd (IGL) for CGD network in Ghaziabad.
“The board does not agree with it. We will inform the Court that Section 16 has been notified. We will also bring to the Court’s notice that the petroleum ministry has authorised IGL for Ghaziabad. We will wait for the Court’s decision. But the Board stands by the second round of bidding (where bids were invited for Ghaziabad along with six cities),” said a person close to the development.
The ministry authorised IGL as an entity to undertake city gas business in Ghaziabad on June 29. On July 15, it notified Section 16 of the PNGRB Act. The matter was listed for hearing in Supreme Court on July 20. However, since IGL had not replied to the notice, hearing would take place at some later date.
IGL, which had earlier claimed a pre-PNGRB authorisation for city gas operations in Ghaziabad, and Voice-of-India, a non-government organisation, had challenged PNGRB’s power to issue the authorisation for CGD network in the Delhi High Court. The central government had also supported IGL’s case by saying that the board did not have authorisation powers. The IGL action followed the regulatory Board’s rejection of its application for Ghaziabad (since IGL had made negligible progress in the city at the time PNGRB Act came into force on October 1, 2007) and invitation of bids for Ghaziabad, in which IGL also bid but was disqualified.
The January 21 order of the Delhi High Court had struck down the powers of PNGRB to issue authorisation for CGD projects due to the non-notification of Section 16. The section authorises the regulator to lay, build, operate or expand a city or local natural gas distribution network. The order also said that the board could not invite bids for Ghaziabad and directed it to give a fresh hearing to IGL’s application of pre-PNGRB authorisation. IGL, however, did not go back to the board.
Both these decisions have been challenged by the board in the Supreme Court. Since the High Court order struck down the board’s power to issue authorisation for CGD business, the ministry went ahead to authorise IGL for Ghaziabad.
