“A regulatory house divided” by Latha Jishnu (November 29) is targeted at me as the chairperson of the PNGRB and the entire organisation which, according to Ms Jishnu, is riven by dissension. Nothing could be further from the truth.
The chairperson has the powers of general superintendence and directions in the conduct of the affairs of the Board. Internally, all draft regulations go through repeated discussions in which all members and the concerned staff participate. These are brain storming sessions with free expressions of ideas and suggestions. The approach generally followed is that the chairperson or any member holding a point of view should be able to convince others or get convinced himself before the matter is submitted formally to the Board for approval. All regulations and indeed all major decisions of the Board have gone through this process.
Any matter submitted to the Board shall be decided by a majority of the members present and voting. There is no requirement of unanimity. But all decisions so far have been unanimous.
A point has been made that detailed minutes of Board meetings are not kept, dissent notes are not made part of the proceedings and many decisions are taken at informal meetings. As indicated above, matters are discussed in order to arrive at a consensus before it is submitted to the Board for decision. All members and the concerned staff take part in these meetings. It is the universal practice that minutes of the Board reflect only decisions and not who said what. I am not aware of any practice where dissent notes are appended to the minutes of a Board meeting, particularly when the member concerned was present in the Board meeting and did not raise the issue.
A copy of the minutes of each meeting is circulated to members which are signed by the chairperson after it is confirmed in the succeeding meeting. In all the instances quoted by Ms Jishnu, the minutes were ratified unanimously.
Coming to the dissent note by two members mentioned, a joint note by two members was submitted to the chairman with regard to the proposed modification of draft regulations for fixation of transmission tariff for natural gas pipelines. The issue had not been raised by either member in the meeting of the Board, the minutes therefore did not reflect the views subsequently expressed by the two members. Besides, the proposed modifications to the regulations were subsequently gone into detail and approved by the Board. The subsequent meeting of the Board ratified the minutes.
As for acting in haste, once the bidding process for new pipelines started, any major modification would have vitiated the transparency of the process. And since the Board was under pressure to put in place all the regulations necessary for grant of authorisation and fixation of tariff keeping in mind the impending flow of KG Basin gas, a decision could not have been postponed.
No changes have been carried out to the concept of tariff zones as the basis of fixation of transmission tariff. It was decided to modify the regulations for fixation of transportation tariff, which were yet to be notified, as a consumer would have had to pay a much higher transportation rate for natural gas delivered over a short distance as compared to the product transported over a long distance. The Board decided to rationalise the formula so that the transportation tariff would have a direct bearing on the distance of transportation, while retaining zonal tariff basis. Consumers will have to pay a much lower transportation tariff than if the regulations had not been amended.
As for the issue of the Board not having powers to act due to the non-notification of Section 16, Member (Legal) submitted a note in this regard. This was considered by the Board and a reference made to the ministry for corrective action if any. The Board decided to go ahead as per its own interpretation of the Act. The ministry clarified that the notification bringing into effect all the provisions of the Act except Section 16 had the approval of ministry of law. No entity has raised this issue in court or challenged the authority of the Board.
The chairman maintaining official files is neither curious nor unusual; opening of part-files is a routine affair. The intention was that the Board should not be stuck in any matter because the entire file has been submitted to a court of law/tribunal consequent to a decision of the Board being challenged.
As for being a one-man show, in no regulatory body is there any requirement for all matters to be referred to the Board. If this was so, a Board that meets every two months can come to a standstill. After a regulation has been approved by the Board, surely approval of the Board is not required at every stage for processing applications for authorisation in compliance with the regulations. This process is carried out by the concerned officers under the supervision of Member (I). The decision to invite bids for six cities as also for subsequent cities was approved by me as the chairperson on the proposal of Member (I) after the EOIs had been processed in conformity with the regulations.
The Board’s decision is to empower the chairperson for taking appropriate decision for grant of authorisation. The chairperson can form a committee to consider the matter and hear an applicant in cases where an adverse decision is likely to be taken. A final decision is taken at the chairman’s level after taking into account the recommendations of the committee. This practice is standard in cases where hearing has to be given to parties before a decision is taken. A committee is by its definition a recommendatory body. There is no provision for its conclusions to be binding on the chairperson.
L Mansingh, Chairman
Petroleum & Natural Gas Regulatory Board
Latha Jishnu responds:
The rift in the Board is common knowledge. News reports of differences over several issues have been surfacing for months. The former petroleum secretary pulled up the chairman publicly. The ministry asked the Board if the decision not to accept government authorisation of IGL was a Board decision or that of the chairman.
Mr Mansingh’s letter does not contradict the points in my articles. Voting has never taken place on any agenda item in any of the 12 Board meetings although members have been pressing for voting. If all decisions have been unanimous, can he explain the dissent notes, of which I have six in my possession? None of the dissent notes have been recorded although boards customarily do so.
Mr Mansingh concedes that he alone was responsible for the decision to call for bids for CGD networks in several cities despite serious reservations expressed by some members. It is extraordinary that the rest of the board was kept in the dark about a decision relating to the core mandate of the board. In no other regulatory board are issues relating to the core mandate taken unilaterally by the chairman.
The concept of tariff zones has not been changed; I said it is proposed to be changed. I reiterate that the Board intends to change the zone tariff in such a way that only new entities benefit. Authorisation is the core function of the board. How can a delegated body, the Board, further delegate its functions to an individual? This decision was taken at a meeting where two Board members were not present.
Mr Mansingh blames “a few disgruntled elements”. If all is well, why are there disgruntled elements in the Board?
