Bar GAIL from tender process: IOC

Bar GAIL from tender process: IOC

In a legal dispute between three state-owned firms over laying of a natural gas pipeline, Indian Oil Corporation on Monday sought to restrain GAIL (India) from participating in the tender process for the laying of a 1,175 km pipeline.

The dispute is over the Ennore-Thiruvallur-Bengaluru-Puducherry-Nagapattinam-Madurai-Tuticorin pipeline with a capacity of around 18.35 MMSCMD.

Seeking recall of the last month’s apex court order that directed the the Petroleum and Natural Gas Regulatory Board to consider GAIL’s financial bid, IOC said that it has already emerged as the successful bider and is entitled to grant of authorisation for laying, building and operating the natural gas pipleine.

Wanting to be impleaded as a party in the matter, the oil firm said that the December 18 directions directly affected its business. Besides, GAIL was not eligible to participate in the bid as it failed to meet the eligibility criteria as the board had imposed a civil penalty of Rs 1 lakh for indulging in restrictive trade practices.

According to IOC, the financial bids have already been opened by the board on December 8, much before the apex court’s order. “The opening of the financial bid was conducted as per the directions of the board on December 8 in presence of representatives of the two technically qualified bidders i.e. IOC and Chennai-based IMC Ltd. During the financial bid opening, the representatives of PNGRB shared the details of the financial bids submitted by both technically qualified bidders. Applicant’s financial bid has been found to be of highest composite score. As such, the applicant is the successful bidder in the said bid and is entitled to grant of authorisation for laying, building and operating the bid out natural gas pipleline,” IOC’s appeal stated.

PNGRB had in December 26, 2013 disqualified GAIL by holding it guilty of indulging into restrictive trade practices by preventing the shippers like Gujarat State Petronet Ltd (GSPL) the access of common carrier capacity in its common carrier pipelines on Reasonable Endeavour basis.

However, a bench headed by Justice J Chelameswar on December 18 stayed the board’s order, which was upheld by the Aptel in November last year. The matter has been now posted for futher hearing on February 14. Even GAIL has been asked to file reply to the IOC’s application.

GAIL in its appeal had stated that the board being a creature of a statute can only exercise such powers as are vested in it by the statute.

“If an action or arrangement is not considered to be violative any provision of the statute then the Board had no power to render the same action as being discriminatory and restricted trade practice under the same statute…Regulation 5 and 6 clearly empowers the Appellant (GAIL) to enter into contracts for transportation of natural gas on such terms and conditions as mutually agreed between the parties and which are not violative of the provisions of the PNGRB Act and regulation,” additional solicitor General Tushar Mehta and counsel Ankit Jain, appearing for GAIL, had argued.

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