NEW DELHI: The Central government kicked off the bidding for city gas distribution licenses on Tuesday, with over 86 permits up for grabs covering 174 districts in 22 states. The round is touted to be the largest such exercise undertaken in India and is expected to net around Rs 70,000 crore.
According to the Petroleum and Natural Gas Regulatory Board (PNGRB), permits for selling CNG and piped cooking gas will be available in 86 geographical areas (GAs), made by clubbing adjacent districts, in the ninth city gas distribution (CGD) bidding round. Oil Minister Dharmendra Pradhan, launching the round, pointed out that the GAs cover 24 per cent of the country’s area and 29 per cent of its population. The last day for bidding is July 10.
According to Pradhan, the government is “targeting to raise the share of natural gas in the primary energy basket to 15 per cent from current 6 per cent, in next few years”. The latest round will also play a crucial role in ensuring the achievement of Prime Minister Narendra Modi’s target of giving piped cooking gas connection to 1 crore households, roughly triple the current size, by 2020.
Certain changes have been made this time round however, with bidders asked to quote the number of CNG stations to be set up and number of domestic cooking gas connections to be given in their first eight years of operation.
Before this, bidders were asked to quote only the tariff for the pipeline that carries gas within the city limits. These bidding criteria did not include the rate at which an entity would sell CNG to automobiles or piped natural gas to households using the same pipeline network, leading to companies offering one paisa as the tariff to win licences.
Under the new guidelines, maximum weightage of 50 per cent has been given to the number of piped gas connections proposed in eight years from the date of authorisation, as compared to 30 per cent earlier.
Licences for Bhopal in Madhya Pradesh, Ahmednagar in Maharashtra, Ludhiana and Jalandhar in Punjab, Barmer, Alwar and Kota in Rajasthan, Coimbatore and Salem in Tamil Nadu, Allahabad, Faizabad, Amethi and Rai Bareli in Uttar Pradesh, Dehradun in Uttarakhand and Burdwan in West Bengal are on offer in this round.