Expressing its dismay on how PSU firms GAIL (India) Ltd and Indian Oil Corporation (IOC) are pitched against each other, the Supreme Court on Monday sought attorney-general Mukul Rohtagi’s response on a legal dispute between the two state-owned firms over the laying of the Ennore- Thiruvallur-Bengaluru-Puducherry-Nagapattinam-Madurai-Tuticorin natural gas pipeline.
IOC has sought to restrain GAIL from participating in the tender process for the laying of the 1,175-km pipeline having a system capacity of around 18.35 MMSCMD.
A bench headed by justice J Chelameswar sought the Centre’s response on the issue. Rohtagi will have to address the court on Tuesday. “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,” it asked.
Seeking a recall of the apex court’s order last December that directed the Petroleum and Natural Gas Regulatory Board to consider GAIL’s financial bid, IOC said that it has already emerged as the successful bidder and is entitled to the grant of authorisation for laying, building and operating the pipleine. However, Gail requested the apex court to allow it to participate in the tender process.
Seeking 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 R1 lakh for indulging in restrictive trade practices.
According to IOC, the financial bids have already been 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. The 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 pipleline,” IOC’s appeal stated.
PNGRB had in December 26, 2013 disqualified GAIL by holding it guilty of indulging into restrictive trade practices by preventing the shippers like Gujarat State Petronet Ltd the access of common carrier capacity in its common carrier pipelines on reasonable endeavour basis.