The Hindu Business Line : State politics hits gas T&D cos in UP

Kolkata, July 4 Gas transportation and distribution companies in Uttar Pradesh face uncertain future. In Lucknow, two companies Green Gas Ltd (GGL) and Gujarat Adani Energy are now pitted against each other over city gas distribution rights. Both invested in creating city gas supply infrastructure. Gas supply could be introduced in the city only partially.

Of the two, GGL – a joint venture between GAIL and Indian Oil – was a Central nominee and sunk Rs 57 crore in creating CNG (compressed natural gas) production facility and opening CNG stations beginning June 2005 but was stopped short of laying the requisite pipeline network by the previous Samajwadi Party government. The company is currently incurring heavy losses.

The Mulayam Singh Government instead awarded the right to Gujarat Adani Energy Ltd – a 56-per cent subsidiary of Adani Enterprises – in February 2006.

Govt raises doubt

Till June this year, when the issue came under the scanner of the new (Mayawati) government in UP, Adani has created 27-km pipeline network. The company’s investment is now undergoing scrutiny by the State Government. According to sources, in a recent meeting the State Government has raised doubts about gas sourcing arrangement of Gujarat Adani Energy. When contacted, company sources admitted troubles related to its city gas project in Lucknow but expected an early solution of the same. The UP Industrial Development Commissioner was not available for comment.

Green Gas gets nod

Meanwhile, GGL is verbally asked to gear up creating the infrastructure once again. While GGL is expecting a formal go-ahead in this regard shortly, the job will be easier said than done.

According to GGL sources, Gujarat Adani has laid pipeline along the route identified by the company and in a city like Lucknow it would be difficult to accommodate two parallel city gas supply systems.

Though the GGL Managing Director, Mr J.K. Singh, is now gearing up to launch the alternative route survey, sources said the company has drawn attention of the State Government that the Mulayam government allowed Gujarat Adani Energy to enter city gas business irrespective of a Supreme Court order (based on Presidential reference) that only the Union is competent to decide on issues related to natural gas.