Putting an end to a legal battle between two PSUs — GAIL (India) and Indian Oil Corporation (IOC) — the government on Wednesday told the Supreme Court that the oil ministry has decided to award the contract for laying of a 1,175-km Ennore-Tuticorin gas pipeline to IOC. The clarification came after a bench headed by justice J Chelameswar had expressed displeasure over two public-sector companies battling each other over the laying of the Ennore-Thiruvallur-Bengaluru-Puducherry-Nagapattinam-Madurai-Tuticorin natural gas pipeline.
“Both are PSUs and the government has a substantial control on them. We can understand a private party objecting to GAIL’s participation. Why should one department of the government object to the other department? We would like to hear the stand of the Centre,” the apex court said while asking the attorney-general to clarify its stand on the dispute. IOC had sought to restrain GAIL from participating in the tender process for the laying of 1,175-km pipeline having a system capacity of around 18.35 MMSCMD.
Seeking recall of the apex court’s order in December last year’s that directed the Petroleum and Natural Gas Regulatory Board (PNGRB) to consider GAIL’s financial bid, IOC had argued that it has already emerged as the successful bidder and is entitled to grant of authorisation for laying, building and operating the natural gas pipeline. However, Gail requested the apex court to allow it to participate in the tender process.
PNGRB had in December 26, 2013 disqualified GAIL by holding it guilty of indulging in restrictive trade practices by preventing shippers like Gujarat State Petronet (GSPL) the access of common carrier capacity in its common carrier pipelines on a reasonable endeavour basis.
Wanting to be impleaded as a party in the matter, the oil firm said that the December 18 directions directly affected its business. Besides, GAIL was not eligible to participate in the bid as it failed to meet the eligibility criteria, as the board had imposed a civil penalty of Rs. 1, 00,000 for indulging in restrictive trade practices. According to IOC, the financial bids were already opened by the board on December 8, much before the apex court’s order.
“The opening of the financial bid was conducted as per the directions of the board on December 8 in presence of representatives of the two technically qualified bidders i.e. IOC and Chennai-based IMC Ltd. During the financial bid opening, the representatives of PNGRB shared the details of the financial bids submitted by both technically qualified bidders. Applicant’s financial bid has been found to be of highest composite score. As such, the applicant is the successful bidder in the said bid and is entitled to grant of authorisation for laying, building and operating the bid out natural gas pipeline,” IOC’s appeal stated.