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The Centre will take a call on hiving off public sector enterprise GAIL (India) Ltd’s transmission business into a wholly owned subsidiary, according to the company’s Chairman and Managing Director Manoj Jain.
“The marketing and petrochemical business will remain with the parent company, while the transmission business will be hived off into a separate but wholly owned subsidiary by GAIL. This will be done per the directives issued by the Centre,” Jain told reporters here.
“The Union Cabinet is to take a final call on the directives to be issued. GAIL will be able to execute this division within a year of the decision being taken by the Centre,” he added.
In response to a query on the proportion of revenue attributable to the new subsidiary, Jain told BusinessLine : “The new subsidiary will have an around 15 per cent share of GAIL’s revenue and around one-third share of the bottomline.”
The subsidiary structure will be similar to that of GAIL Gas, another wholly-owned subsidiary of the company. While GAIL Gas is tasked with implementing city gas distribution projects, the new subsidiary will operate in the transmission business.
On whether the transmission subsidiary will be subsequently listed as a separate entity, Jain said that will be decided upon at a later stage. He also said the transmission business will have a larger share of the company’s profits, with gas prices appearing to remaining subdued in the medium term.
Natural gas price
Commenting on the price of natural gas, Jain said the gap between spot and long term price is widening. The company is looking at it and will take a call at an appropriate time, he added. He was responding to queries on the possibility of renegotiating existing long-term contracts that the company has signed.
On the adjusted gross revenue (AGR) demand raised by the Department of Telecommunications (DoT), Jain said GAIL is hopeful that the company will not have to pay the amount sought.
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