The bidding process for city gas distribution (CGD) networks is set to start in earnest with the Petroleum and Natural Gas Regulatory Board (PNGRB) ready to release the technical specifications in a few days. PNGRB will call for technical bids within the next month and is hopeful of issuing authorisation to the prospective city gas distributor by the end of March 2009.
At the fifth Round Table on ‘City or Local Natural Gas Distribution Networks’ organised by the Confederation of Indian Industry (CII), Mr L K Singhvi, Member (PNGRB) outlined the need for the creating the regulatory board that was more approachable to the consumers.
Mr M K Sinha, President and CEO, IDFC Project Equity Co. Ltd said, “the demand for natural gas will go up considerably and will come up in a big way in India”. Given the efficiency of natural gas and its economic advantages, he added that industrial and commercial institutions will switch to natural gas as a single fuel option.
The PNGRB has come out with the processing of EOIs leading to authorisation for CGD projects. The public consultation process in respect to about 70 cities has already been completed. The concerned regulations for authorisation, exclusivity of marketing and infrastructure, tariff determination have also been notified.
Mr B S Negi, Member (Infrastructure), PNGRB, gave a detailed presentation on the procedures / checklist on the process of authorisation for CGD projects and network tariff. He urged prospective bidders to ensure that there bid is compliant with all the listed requirements.
He revealed that the Board has given a 30 per cent weightage for companies offering maximum household connections of piped gas for getting the licence. Although the price of gas is outside regulatory purview, the regulator is ensuring that the cost of transporting gas to the consumer premises is kept at the minimum.
The bid will be based on different weight age — network tariff (40%), the transportation rate for carting the gas, CNG compression charge (10%), connection to maximum number of households (30%) and size of the network in terms of inch-kilometre pipelines (10%) — to incentivise quick development of CGD network, Mr Negi said. In normal case, the entire bidding and authorisation process would take about 150 days, he said.
Mr Negi, however, stressed that entities should pay serious attention to the obligations outlined in the regulation and factors these into their bid.
The interactive meeting here was the fifth in a series of five roundtables organized by CII to increase awareness and give a boost to the consultative process adopted by the regulator.
