Companies

IGL settles ₹800-cr dispute with North Delhi Municipal Corporation

Twesh Mishra New Delhi | Updated on January 12, 2018 Published on January 13, 2017

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Indraprastha Gas Ltd (IGL), which distributes piped gas and CNG in the Capital, has settled the ₹800-crore demand raised by North Delhi Municipal Corporation (NDMC), according to a top company official.

Speaking to BusinessLine, the official said: “As per a subsequent notification issued on September 2016, only a one-time charge of ₹684 per metre is payable on all permissions.”

According to an ICICI Direct research report of May 2016: “NDMC has issued a circular in relation to recovery of usage charges for granting of way leave facility used by the company for its network of underground gas facility under NDMC facility… NDMC has issued a letter to pay usage charges amounting to ₹75,162 per meter per annum. The circular also conveys that the charge has to be paid from the date of permission granted for laying the pipeline facility and is also applicable for the new installations.” This was highlighted as a contingent liability by ICICI Direct.

NDMC’s total demand from IGL swelled to nearly ₹800 crore under the conditions mentioned by the circular. Both existing networks and all new networks were to bear the burden of this new levy.

According to officials aware of the settlement, 1 km of IGL’s pipeline used to cost ₹50 lakh, inclusive of construction, equipment and permission charges.

This will be increased by 12 per cent to ₹55 lakh/km for all new pipelines in the NDMC region. The additional ₹5 lakh per km will be added in NDMC’s kitty.

Usage charges

In August 2015, NDMC had decided to impose way leave or usage charges on infrastructure firms for laying down optical fibre cables or wires networks on corporation roads or properties under its jurisdiction.

The municipal body had imposed this levy under the Delhi Municipal Corporation Act, 1957, and had estimated earning revenue of nearly ₹5,000 crore every year at the rate of ₹75,162 per running metre. This levy was to be borne by telecom companies, discoms, MTNL, IGL, Delhi Jal Board and other institutions.

Published on January 13, 2017
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