Talks over VMC dues remain inconclusive

Talks between Vadodara Municipal Corporation (VMC), Oil and Natural Gas Corporation (ONGC) and GAIL India over reduction of interest rates on outstandings are yet to reach any conclusion.

On November 24, GAIL had asked VMC to settle dues worth Rs 282 crore with ONGC in 15 days. ONGC was the gas supplier to VMC before GAIL.

GAIL said if VMC fails to clear the dues it will discontinue gas supply to the civic body.

According to the notice, VMC has outstandings of Rs 35 crore with ONGC for more than last 30 years.

"We are in touch with the authorities of ONGC and GAIL and have asked them to settle the issue soon. We have argued that there should be some relaxation in the interest rate terms as the issue of outstandings is too old," said G P Joshi, commissioner of VMC.

"We have not heard anything about discontinuing gas supply by GAIL and as of now we are receiving adequate gas supply," Joshi said.

It is learnt that VMC has requested ONGC and GAIL to reduce the rate of interest on dues. GAIL has calculated the dues at a compounded interest rate of 18 per cent, while VMC wants it to be at a simple rate. It has also sought to break the payments into installments.

Joshi declined to provide details about its talks with GAIL and ONGC.

Meanwhile, Gujarat Adani Energy Ltd (GAEL) is eyeing the rift between GAIL and VMC as an opportunity to enter the domestic market of Vadodara as a gas supplier.

The group chief executive officer, Sanjay Gupta had earlier said: "We are interested in taking over the liquefied natural gas distribution project run by VMC. We have already forwarded our proposal asking them to valuate the existing set-up."

VMC has forwarded the proposal made by GAEL to the gas committee of VMC.

GAEL has a licence to distribute gas in Ahmedabad and Vadodara.

M P Sutaria, chief engineer of VMC gas project, said: "The proposal sent by the Adanis is pending with the gas committee. We have not started working on the offer. It is too premature to comment on the plan to change the gas supplier."