GAIL moves SC against PNGRBs decision

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Aug 17 2012, 02:39am hrs
GAIL India has moved the Supreme Court challenging the Appellate Tribunal for Electricity order that upheld the PNGRBs decision to accept the technical bid of the Gujarat State Petronet-led consortium for laying the R5,000-crore Mallavaram-Bhopal-Bhilwara-Vijaipur gas pipeline project.

GSPL, which currently operates about 2,000 km of pipelines in Gujarat, has a 52% stake in the consortium, with Indian Oil Corp holding 26%, and Bharat Petroleum Corp and Hindustan Petroleum Corp having 11% each. The grouping had emerged as the lowest bidder for the project, ousting GAIL.

The pipeline, around 1,585 km long with a design capacity of at least 30 mmscmd, will transport gas from Andhra Pradesh to Rajasthan and Madhya Pradesh. The Petroleum and Natural Gas Regulatory Board (PNGRB), which authorises entities to lay, build, operate and expand natural gas pipelines in the country, had allegedly accepted the technical bid of the consortium despite the bid not being in conformity with the tender conditions.

A bench headed by Justice TS Thakur, however, asked GAIL to make necessary changes in its appeal which failed to raise any substantial question of law.

GAIL, which operates various pipeline networks of over 7,650 kms for transportation of natural gas, argued that the once the tender has been issued and the bids are submitted by the aspirants, it is not open to the Board to revise the tender under the guise of introducing post-bid clarifications.

The tender floated was a zero deviation tender and no condition in variance of the terms of the tender could be added any by any bidders. Therefore, the tribunal erred in upholding the decision of the board of accepting the technical bid of the consortium despite material deviation from tender terms, the petition stated.

According to the PSU, the board instead of giving reasonable time to all the bidders for resubmission of the bids erred in rejecting the appeal.

Senior counsel Mukul Rohtagi, appearing for Gail, argued that the flow of natural gas from the KG Basin and the purpose of the pipeline are relevant for fixing the pipeline route.

He said that PNGRB was required to clearly specify the originating and termination points of the gas line in tender, but for specific instructions the bidders had every reason to proceed on the basis of general interpretation which means pipelines are to be 'unidirectional' from point of origin from KG Basin in AP to termination points in MP.

While dismissing GAIL's petition against the PNGRB order, the tribunal had directed the board that in future it should make all attempt to keep the tender out of such conceptual ambiguity without leaving scope of any confusion.