Adani Gas hits rough weather in Rajasthan
Oil regulator PNGRB rejects company’s bid for CNG retailing in Jaipur, Udaipur
The tide and ebb in fortunes of Adani Gas Limited (AGL) in Rajasthan seems to be in sync with change of power in the state. The going got smooth when BJP was in power, and hurdles cropped up when Congress held the reins.
Oil regulator Petroleum and Natural Gas Board (PNGRB) on February 28, rejected AGL’s claims of having deemed authorisation to operate a city gas distribution (CGD) network in Jaipur and Udaipur before the regulator came into existence. In the 23-page order, the regulator further highlighted non-compliance on several issues by AGL. “Based on the analysis and deliberations of the Board after hearing and considering the submissions of AGL and keeping in mind the observations/directions of the Supreme Court of India, the application of AGL for Jaipur and Udaipur cities for CGD authorisation is hereby rejected,” it said.
The Central Government has approved Adani’s 14,000-crore SEZ project in Jharkhand to supply power to Bangladesh. However, the rejection in Rajasthan means it will not be able to supply CNG to automobiles and piped natural gas to households in Jaipur and Udaipur. The rejection comes as a huge setback for the Adani Group after it won the bid to operate six airports in the country for 50 years in February.
While the company claimed that it had invested substantially in the two cities, PNGRB revoked the claims stating that no documentary evidence was presented by Adani Gas to show the mammoth expenditure it claims to have incurred on the project.
Under the umbrella of power
It was in November 2005 that AGL had submitted a bid to set up a CGD in Udaipur and Jaipur in response to the state government’s invitation. The then BJP government in the state had issued a no-objection certificate to Adani Gas in March 2006, after which the company has deposited a commitment fee of Rs 2 crore.
Subsequent to this, the UPA-led central government in October 2007 appointed PNGRB as the regulator for the sector. Soon after, PNGRB sought application from companies operating CGD networks before its appointment as the regulator.
In March 2008, PNGRB issued a notice to AGL stating “it did not have the requisite authorisation from the central government”. The company submitted separate applications for authorisation for Jaipur and Udaipur to the regulator on August 28, 2008.
On May 18, 2011, the Congress-led government in Rajasthan withdrew the NOC given to Adani Gas. Subsequently on May19, 2011, PNGRB rejected Adani Gas’ application for both the cities.
The company challenged the decision of PNGRB before Rajasthan High Court which dismissed its petition. It then filed an appeal before the Supreme Court.