What started as an argument over whether a company should be allowed to bid for a Rs 1,416-crore pipeline contract has become a full-fledged turf war between the Petroleum Ministry and Gail (India), the high-flying Navaratna.So far, Gail seems to have held firm. PSL, the company in question, remains blacklisted from bidding for the Dahej-Uran pipeline project. But the ministry, which asked Gail to reconsider PSL’s case, is obviously seething that its directors on the Gail board could not swing the decision.This has prompted it to appoint an additional government director on the Gail board, apart from its two other nominees.As the battle rages, Petroleum Secretary S.C. Tripathi has also made an acerbic noting: ‘‘Functional directors have become zero because of Chairman & Managing Director; independent directors are perhaps not being fully briefed and government directors (are) not able to carry the Board.’’His comments came after Gail challenged the frequent suggestions and letters that the ministry kept issuing on the project and on PSL.At first, the project consultants excluded the technology that PSL was offering but Gail had to relent when government intervened through a Presidential Directive last October.Still, PSL could not bid for the project since it had been blacklisted by Gail for three years until June 2007 due to poor performance in another project. The tender was to be opened on January 18.The ministry forwarded a petition from PSL to Gail and asked it to reconsider the blacklisting of all vendors. ‘‘If the grievances of the parties are not redressed well before the tender closing date, the purpose of the government’s instructions will be defeated,’’ the ministry said on November 29.Gail refused to budge and decided to open the tender on January 18. At the same time, its board questioned the ministry’s constant intervention. ‘‘It also needs to be examined if any instructions from the government can be construed as Presidential Directive. A separate agenda in the matter of instructions from the government be brought to the Board at the earliest opportunity,’’ said the Board on January 10.A week later, Gail made an apparent concession. It agreed to reduce PSL’s blacklisting period from three years to one — but that still did not make the company eligible to make a valid bid for the DUPL project.The ministry was up in arms. Tripathi ordered the appointment of his Additional Secretary on the GAIL Board in addition to the two government directors. The Additional Secretary was told to call all functional directors ‘‘to get to know the working of GAIL management better so as to initiate necessary remedial steps in the style of management working.’’Tripathi said there was no malice in this. ‘‘With time, the differences between the Board and the government were increasing. As the Additional Secretary is a mature person, he can tell the government if something is going wrong and he can improve the communication between the two,’’ he said. He added that there was no move to subvert the Gail Board.Gail made it clear it did not want to be singled out by the ministry. It said: ‘‘A Presidential Directive has been issued in the case of DUPL gas pipeline tender. To ensure similar standards are adopted uniformly. Gail has suggested a uniform policy in this regard may be applied to all oil and gas PSUs.’’ Following Gail’s rebellion, Petroleum Minister Mani Shankar Aiyar has directed all further actions be put off until the ministry’s credentials as acting in the public interest were established.
