India’s biggest city gas distribution auction ends: Adani largest bidder, eyes 52 cities; check others

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Published: July 11, 2018 12:43:52 PM

Adani Group bid for the highest number of cities for gas retailing licenses, while RIL-BP JV withdrew from the bidding process at the last moment.

Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation, GAIL India, Adani Group, CNGThe ninth round of auction for city gas distribution (CGD) licenses in 86 cities saw over 400 bids.

Even as RIL-BP JV withdrew from bidding at the last moment, the ninth and biggest round of auction for city gas distribution (CGD) licenses in 86 cities saw over 400 bids with potential investment of Rs 70,000 crore. The latest round of auction, which ended on July 10, witnessed the abstinence of RIL-BP combine from placing any bids. The Reliance-BP joint venture dropped out of the bidding process after coming close to bidding for licenses to retail gas in 15 cities, PTI reported citing sources.

In a statement earlier this week, ratings agency CRISIL said the latest ninth round of auction of CGD licenses is set to alter the industry landscape with the government expecting investments of Rs 70,000 crore from winning bidders, or four times the cumulative Rs 15,000-18,000 crore invested till fiscal 2018.

“CRISIL expects the 9th round to receive way better response than before because of revised bidding norms, and the push from the government through favourable policies. These include marketing exclusivity period of 8 years (extendable by 2 years, compared with 5 years earlier), tariff floors to discourage unviable bids, removal of additional bid bond requirement and evaluation of bids based on higher infrastructure creation,” the statement said.

Here are the major bidders in the ninth round of auction for city gas distribution license:

Adani Group: Adani Group bid for the highest number of cities for gas retailing licenses. The Gautam Adani-promoted company placed the highest number of bids eyeing 52 cities. Adani Gas bid for 32 cities on its own and another 20 cities in an equal joint venture with state-owned Indian Oil Corp (IOC), PTI reported quoting sources.

GAIL Gas: State-owned gas transmission company GAIL’s CGD arm GAIL Gas put in bids for close to 30 cities.

IGL: Indraprastha Gas Ltd, which retails CNG in the national capital region, bid for 13 cities.

Essel Infraprojects: The infrastructure arm of the Essel group Ltd has put in a total of 7 bids.

India Gas Solutions: The 50:50 joint venture of UK’s BP Plc and Reliance Industries, which was formed to retail natural gas in India, looked at licenses for 15 cities but did not place any bid at the close of bidding on Tuesday.

Details of bids of other subsidiaries of GAIL, Mahanagar Gas Ltd and Gujarat State Petroleum Corp (GSPC) remained unknown.

In the ninth round of bidding for CGD license, as many as 86 geographical areas (GAs) made by clubbing adjacent districts were on offer. “The technical bids would be opened between July 12 and July 18, 2018,” Petroleum and Natural Gas Regulatory Board said in a statement. The PNGRB added that it would try to expedite the process of finalizing the bids which were earlier slated for October.

The cities which were on offer for CGD licences are as follows: Bhopal in Madhya Pradesh; Ahmednagar in Maharashtra; Ludhiana and Jalandhar in Punjab; Barmer, Alwar and Kota in Rajasthan; Coimbatore and Salem in Tamil Nadu; Allahabad, Faizabad, Amethi and Rai Bareli in Uttar Pradesh; Dehradun in Uttarakhand and Burdwan in West Bengal.

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