With the announcement to acquire 65.12% controlling stake in GGCL from BG Group, GSPC is now the largest City Gas Distribution company of India. Here is how BIG THREE of CGD Sector stand with each other in terms of no. of domestic customers (as of today),
So, couple of years back we had this question: Who is authorized to grant CGD licenses?
After receiving answer from Supreme Court on this, now we have a new question...’Who can regulate the gas tariff for CGD companies?’ :)
Though, Delhi High Court has recently said that PNGRB did not have the authority to fix tariffs, PNGRB has decided to go to Supreme Court…(Reference: Link) and thus…(drum roll sound please)PNGRB vs IGL, Part-II begins… I appreciate IGL’s spirit in fight against PNGRB :)
I have received couple of e-mails asking about the result of the PNGRB Vs IGL case in Supreme Court. Actually it is my mistake that I missed to post the final part after my initial two posts on this subject.
Following are the highlights of what Supreme Court said:
PNGRB can process CGD licenses to provide PNG and CNG
PNGRB cannot process authorisations for areas where licences have already been issued by the central government (e.g. Ghaziabad)
Fill up all vacancies on the board
You may refer to this link for the news(dated12 May 2011) in detail.
I have a simple question: ‘Who is authorized to issue CGD licenses in India?’
But it seems that there is no simple, one line answer.
This mystified (for me) case of PNGRB vs IGL made me to dig into the matter. Here is what I found. I am attempting to put this in chronological order.
PNGRB was set up by PNGRB Act 2006
The PNGRB Board came into existence by a notification in Oct 2007 but the notification didn’t implement ‘Section 16’. (Now you will ask, “What is Section 16?”-Answer: Section 16 of the PNGRB Act, 2006 gives the regulator (PNGRB) explicit powers to issue authorizations for city gas distribution network.)
2009: PNGRB issued CGD licenses, invited bids:
1st Round:- Kakinada (Andhra Pradesh), Mathura and Meerut (Uttar Pradesh), Kota (Rajasthan), Dewas (Madhya Pradesh) and Sonepat (Haryana) in first round.
2nd Round:- Invited bids for seven cities- Allahabad, Ghaziabad and Jhansi (Uttar Pradesh), Shahdol (Madhya Pradesh), Rajahmundry and Yanam (Andhra Pradesh) and Chandigarh (Punjab).
IGL has pre-PNGRB approval for operations in Ghaziabad from Delhi High Court.IGL and Voice of India (a NGO) moved to Delhi High Court against the board’s move claiming that PNGRB has no power to issue CGD licenses as Section -16 is not notified.
Delhi High Court allows IGL to carry activities in Ghaziabad. The High Court in January 2010 ruled that PNGRB actually did not have the powers and the licenses issued were not valid.
PNGRB moved to Supreme Court
March 2010: The Supreme Court passed an interim order that allowed PNGRB to process bids for licenses but barred it from issuing the CGD license.
July 2010: ‘Section 16’ got notified.
IGL and Voice of India claim that now (after notification of Section 16) PNGRB has rights to issue CGD licenses but the board has already issued licenses (before notification).
Aug 2010: PNGRB appealed Supreme Court to vacate the interim order issued in Mar 2010 since Section-16 has been notified.
Supreme Court has given 3 week’s time to IGL, Voice of India and MoPNG to respond.
Hmm…this case is quite interesting!
08 Nov 2010 will be an important day for Indian City Gas industry :)
