New Delhi: Bidding for setting up a piped gas and a CNG network in Burdwan opened on Tuesday as part of an exercise, under which the government will offer 86 permits in 174 districts across 22 states and union territories.
"The 9th round of city gas distribution bidding covers 24 per cent of the country's area and 29 per cent of its population," oil minister Dharmendra Pradhan said .
The Petroleum and Natural Gas Regulatory Board (PNGRB) said the round was likely to attract investment of Rs 70,000 crore. The last day for bidding is July 10.
Licences will also be offered for Bhopal, Ahmednagar (Maharashtra), Ludhiana and Jalandhar (Punjab), Barmer, Alwar and Kota (Rajasthan), Coimbatore and Salem( Tamil Nadu), Allahabad, Faizabad, Amethi and Rai Bareli (UP) and Dehradun in Uttarakhand.
Pradhan said the government was targeting to raise the share of natural gas in primary energy to 15 per cent from the current 6 per cent in the next few years.
The bid round is aimed at meeting the government's target of giving piped gas to 1 crore households, roughly triple the current size, by 2020.
In the new guidelines, a weightage of 50 per cent has been given to the number of piped gas connections proposed in eight years , compared with 30 per cent earlier.
The number of CNG stations has been assigned 20 per cent weightage. The length of the pipeline and the tariffs proposed for city gas and compressed natural gas (CNG) have been assigned 10 per cent weightage each.
A floor tariff of Rs 30 for city gas and Rs 2 per kg for CNG has been put in order to deter bidders from quoting an unviable tariff of 1 paisa per unit, as done previously.
Companies having a net worth of not less than Rs 150 crore can bid for cities with a population of 50 lakh and more, while for cities of 20 lakh to 50 lakh, the net worth is Rs 100 crore.The eligibility goes down with population, with a Rs 5-crore-net-worth firm being eligible for cities with population of less than 10 lakh.
The PNGRB said any entity securing a piped gas licence would have to enter into a supply agreement with a natural gas producer or a marketer on the principle of "at an arm's length" within 180 days of winning the licence.
The entity has to achieve financial closure within 270 days from the date of grant of the licence.
The company would have eight years of marketing exclusivity in the given city. Current licences provide for 5-year exclusivity.
"The amended regulation has addressed most of the concerns of the sector. The bidding criteria has been revised such that 80 per cent weightage, as compared to 0 per cent earlier, is assigned to infrastructure creation so that gas network penetration is maximised.
"At the same time, participation of more players is incentivised with the extension of marketing exclusivity period for authorised entities to eight years compared with five years earlier," said K. Ravichandran, senior vice-president at Icra.
