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Oil regulator PNGRB will this month offer for bidding CNG retailing licences in 100 cities on revised terms, Petroleum Minister Dharmendra Pradhan said today. The Petroleum and Natural Gas Regulatory Board (PNGRB) has so far held eight rounds of bidding where companies were asked to quote the tariff for pipeline that carries gas within the city limits.
The bidding criteria did not include the rate at which an entity would sell CNG to automobiles or piped natural gas to households using the same pipeline network, leading to companies offering one paisa as tariff to win licences. “PNGRB will offer 100 city gas distribution (CGD) licences for bidding on a new model this month,” Pradhan said at a FICCI conference here.
The new model would have a different bidding parameter besides the geographical or physical area for the licence being dynamic, he said. He however did not offer details of the new bidding criteria. PNGRB had in October last year called for industry comments on an alternate model of bidding criteria for development of CGD network in the country. In a bid to encourage wider participation and improving project delivery, the alternate model suggests bidding on the basis of capex committed, transportation tariff and work programme.
Besides, exclusivity period is proposed to be doubled to 10 years, minimum net worth criteria for bidders tightened, requirement of five technical qualified personnel on permanent roll as compared to three presently prescribed, and district boundaries to be considered as Geographical Area (GA). Last few rounds of CGD have evoked lukewarm response.
The fourth round was altogether cancelled while the fifth saw sparse response. The sixth round of bidding for 34 cities in 2015 got bids for only 20. The seventh round of bidding done to set up CGD infrastructure in 11 smart cities under smart city mission received only 1 bid. Seven cities were offered in the 8th round last year but not all cities have been awarded so far.
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