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GAIL to lease out bandwith capacity

Our Bureau

NEW DELHI, Sept. 27

GAS Authority of India Ltd (GAIL) is projecting a turnover of Rs 11,000 crore and a profit after tax (PAT) of Rs 1,050-1,100 crore for the current financial year, according to the GAIL Chairman, Mr C.R. Prasad. This represents a 31 per cent rise in turno ver and a 22 per cent rise in PAT over the previous year's figures.

Addressing a conference on Wednesday, Mr Prasad announced the company's decision to foray into the telecom sector by leasing out bandwidth capacity along its pipelines.

The company has already signed a memorandum of understanding (MoU) with Bharti Telesonics, BPL Broadband, Shyam Telecom and Escotel Mobiles for this purpose.

The company has structured its foray into three phases. In the first phase to be completed by 2001, the optical fibre network will cover 3,500 km connecting major cities in Maharashtra, Gujarat, Rajasthan, Haryana, Delhi, Uttar Pradesh and Madhya Pradesh . The second phase, to be completed by the end of 2001, will cover another 3,000 km in the northern, western and southern regions.

The third phase, to be completed by the end of 2002, will entail the creation of a north-west-south telecommunication corridor connecting three metros and four mini metros.

According to Mr Prasad, GAIL will be entering into an MoU with Power Grid Corporation of India Ltd (PGCIL), which will also be using its infrastructure to lease out bandwidth.

Under the MoU, GAIL and PGCIL will lease out their combined bandwidth capacity in geographic areas where their infrastructures overlap (where the transmission lines and pipelines are along the same routes).

Mr Prasad said that at the end of the third phase, the telecom business would result in an internal revenue generation of Rs 300 crore. Although initially GAIL would be leasing out the bandwidth for a fixed amount, the company would later consider a reve nue sharing method, Mr Prasad said.

GAIL projects an internal revenue of Rs 1,500 crore per annum from the existing businesses for the next five years to fund its future non-telecom plans. These include expansion of the existing 3,00,000 tonnes petrochemical complex to 5,00,000 tonnes, lay ing of pipelines to establish a national gas grid, bidding for coal bed methane blocks, gas hydrate explorations, LNG terminals and LPG pipelines.

As part of its plans to market gas in the country, the company is in talks with National Iranian Gas Company (NIGC) for a joint venture to export gas from Iran to India. According to officials, Reliance is also in talks with NIGC for a similar project.

GAIL has an equity participation in Petronet LNG Ltd which is promoting the five MMTPA Dahej and the 2.5 MMTPA Kochi terminals. It also has a joint venture with Tata Electric Companies and Totalfina for a LNG terminal at Trombay.