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Rs 50,000 cr investment in city gas projects in 10th CGD round: PNGRB

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Dion Global

06 Feb 2019

An investment of about Rs 50,000 crore is expected in setting up of CNG stations and pipelines to take cooking gas to households in 50 towns and cities that were bid out for city gas licence in the 10th round, oil regulator PNGRB said.

As many as 225 bids were received for a licence to retail CNG to automobiles and piped natural gas to households in 50 geographical areas (GAs) offered in the 10th City Gas Distribution bidding round, the Petroleum and Natural Gas Regulatory Board (PNGRB) said in a statement.

Bidding for the 10th round of City Gas Distribution (CGD) licences closed Tuesday.

"The technical bids would be opened between February 7 and 9," it said adding licences would be awarded by month end.

It, however, did not disclose the identity of the bidders, which would be known only after bids are opened later this week.

"Once awarded, it is envisaged that this initiative would help in creating a robust infrastructure by bringing an investment of about Rs 50,000 crore, generate employment and play a significant role in achieving the shift towards a gas-based economy, with natural gas as the next generation, cheaper and environment-friendly fossil fuel," PNGRB said.

The 10th round of CGD saw launch of 50 GAs, covering 124 districts - 112 complete and 12 part - in 14 states in November 2018.

The round would extend city gas coverage to 18 per cent of India's geographical area and 24 per cent of its population, the regulator said.

Together with past rounds, CGD network would now extend to 400 districts, covering 70 per cent of the population.

In the 10th round, bidders were asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operation.

Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and compressed natural gas (CNG), according to PNGRB.

The bid round comes within months of the close of the 9th round, which was the biggest ever CGD licensing round where 86 permits for selling CNG and piped cooking in 174 districts in 22 states and union territories were offered.

The government is targeting raising share of natural gas in the primary energy basket to 15 per cent from current 6.2 per cent, in next few years and the bid rounds are aimed at fulfilling that objective.

They are also aimed at meeting Prime Minister Narendra Modi's target of giving piped cooking gas connection to 1 crore households, roughly triple the current size, by 2020.

Cities offered in the 10th round include Nellore in Andhra Pradesh, Muzaffarpur in Bihar, Kaithal in Haryana, Mysore and Gulbarga in Karnataka, Allapuza and Kollam in Kerala, Ujjain, Gwalior and Morena in Madhya Pradesh, Jhansi and Basti in Uttar Pradesh, Firozpur and Hoshiarpur in Punjab, Ajmer and Jalor in Rajasthan, Nainital in Uttarakhand and Darjeeling and Howrah in West Bengal.

Companies having a net worth of not less than Rs 150 crore could bid for GAs with a population of 50 lakh and more while the same for GAs with a population of 20-50 lakh has been proposed at Rs 100 crore.

The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for GAs that have less than 10 lakh population.