After lukewarm response in earlier rounds, the petroleum ministry’s ninth auction for issuing retail licences for natural gas distribution in 86 geographical locations saw more than 400 bids with Adani Group emerging as the top bidder even while the Reliance-BP combine stayed away from the bidding.
Adani Group bid for 32 permits on its own and another 20 in joint venture with state-run Indian Oil Corp. Another public sector undertaking GAIL India Ltd shored up the auction by putting bids for 29 geographical areas (GAs) through its distribution arm GAIL Gas Ltd, said sources.
Subhash Chandra’s Essel Infraprojects Ltd put in seven bids but India Gas Solutions Pvt Ltd, the joint venture of UK’s BP plc and Reliance Industries, dropped out at the last minute without bidding for any of the 15 areas it had showed interest in, they said.
The NDA government is offering the maximum licences in the 9th round offering permits for selling compressed natural gas (CNG) and piped natural gas (PNG) in 86 GAs made by clubbing adjacent districts in 20 states and two union territories.
Prior to this round, 91 GAs were awarded to firms like Indraprastha Gas Ltd and GAIL Gas. Of these, 56 GAs were awarded through bidding rounds and the rest on government nomination.
There has been poor response to earlier rounds with 4th getting cancelled and the 5th drawing few bids. The 6th round for 34 cities in 2015 got bids for only 20 whereas 7th round for 11 smart cities received only one. Seven cities were offered in the 8th round last year but not all cities have been awarded so far.
“More than 400 bids were received in respect of all the 86 GAs offered in the 9th CGD Bidding Round. The technical bids would be opened between July 12 and July 18, 2018,” Petroleum and Natural Gas Regulatory Board, which conducts the bidding, said in a statement.
It said that though the dateline for finalising the bids was October, it would try to expedite the process.
This time bidders were asked to quote the number of CNG stations for automobiles that it planned to set up and the number of PNG connections it intended to issue to households in the first eight years of operation to be considered for winning.
In previous rounds, bidders were asked to quote only the tariff for the pipeline moving gas within a city limit. It did not ask for the rate at which an entity would sell CNG to automobiles or piped natural gas to households, leading to companies offer one paisa as the tariff to win licences.
To prevent such offers, PNGRB this time set a floor tariff of Rs 30 for city gas and Rs 2 per kg for auto CNG.