Millennium Post

SC lets GAIL take part in tender for Ennore-Tuticorin pipeline

The order came in the backdrop of the finding of Petroleum and Natural Gas Regulatory Board (PNGRB) that the PSU had indulged in unfair trade practices in the past.

PNGRB had, in December last year, held GAIL guilty of indulging in "restrictive trade practice by insisting on high gas transportation charges" from Gujarat State Petroleum Corp Ltd for use of its pipelines from Dahej LNG terminal.

GAIL was also asked by PNGRB to pay a fine of Rs 1, 00,000 and the Appellate Tribunal for Electricity had upheld the order and the penalty.

The apex court was hearing GAIL's plea against the December 2013 order of PNGRB.

The counsel for GAIL sought an order from a bench, headed by Justice J Chelameswar, that it be allowed to take part in the bidding process. GAIL said it had already submitted its technical bid for the project but its commercial bid would not be considered due to the orders passed by PNGRB and the Tribunal against it.

The apex court allowed GAIL's plea observing that both GAIL and Gujarat State Petroleum Corp were government-owned companies and barring the PSU from participating in the project would only benefit private companies. The apex court said it will further hear GAIL's plea against PNGRB and the Tribunal's order in January. PNGRB's December 2013 order had come on the complaint of Gujarat State Petroleum Corp. The Gujarat government-owned company had said GAIL was insisting on ship-or-pay charges for use of pipelines that was unfair trade practice.Ship-or-pay charge is a minimum fee that a gas pipeline company such as GAIL asks for using the pipeline, irrespective of whether the entire contractual quantity of gas is transported or only a part of it.

The Gujarat firm had said that it should be allowed access to GAIL's pipeline on 'reasonable endeavour' basis, which implies paying only for usage. Both PNGRB and the Appellate Tribunal for Electricity, that hears all energy-related appeals, had held that GAIL "acted in a discriminatory manner leading to restrictive trade practices".

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