Gas Projects Hit on Reg­u­la­tory Vac­uum

No re­place­ment for PNGRB chair­man and three re­tired mem­bers; de­ci­sions on pipe­lines stuck

The Economic Times - - Companies: Pursuit Of Profit - San­jeev.Choud­hary @times­group.com

New Delhi: Lack of re­place­ments for the re­tir­ing mem­bers in the past one-and-a-half years has left Pe­tro­leum and Nat­u­ral Gas Reg­u­la­tory Board (PNGRB), the na­tion’s down­stream reg­u­la­tor, with just one mem­ber, mak­ing the board dys­func­tional that can po­ten­tially de­lay the lat­est round of award of rights to build pipe­lines in eight dis­tricts. The board, formed un­der an Act of 2006, com­prises a chair­per­son, a mem­ber (le­gal) and three other mem­bers ap­pointed by the cen­tral gov­ern­ment. Chair­per­son S Kr­ish­nan re­tired in Au­gust 2015 while three other mem­bers—P K Bish­noi, Ki­ran Ku­mar Jha and Sub­hash Chan­dra Ba­tra ( mem­ber-le­gal)—have re­tired in the past six months. Ba­sudev Mo­hanty is the only serv­ing mem­ber on the board now.

The board de­cides by a ma­jor­ity and its de­ci­sions don’t be­come in­valid due to any va­cancy, ac­cor- ding to the Act. But since the quo­rum re­quires three mem­bers, the board can’t meet and de­cide on any­thing. “This has im­paired the work­ing of the board and cre­ated a reg­u­la­tory vac­uum,” said a source with di­rect knowl­edge of the reg­u­la­tor’s func­tion­ing. The gov­ern­ment had last year ad­ver­tised for the po­si­tion of PNGRB mem­ber but there is no clar­ity on its out­come. The oil min­istry didn’t re­spond to ET’s email query on what it was do­ing to deal with th­ese va­can­cies, and if there was a plan to re­place PNGRB by an­other reg­u­la­tor for the en­ergy sec­tor. In the ab­sence of a three­mem­ber quo­rum, the board is un­able to take de­ci­sions re­lat­ing to the down­stream sec­tor PNGRB has a few other va­can­cies as well, in­clud­ing those of key ad­vi­sors, for a long time, con­strain­ing its func­tion­ing, ac­cord­ing to sources. PNGRB’s job is to reg­u­late the re­fin­ing, trans­port and mar­ket­ing of pe­tro­leum prod­ucts, en­sure enough sup­ply across the coun­try, pro- tect con­sumer in­ter­est, foster fair trade, and au­tho­rise com­pa­nies that would build and op­er­ate fuel pipe­lines.

The board has the power of a civil court and a bench com­pris­ing mem­ber (le­gal) and one or more mem­bers nom­i­nated by the chair­per­son de­cides on dis­putes aris­ing among the down­stream com­pa­nies or with out­siders. The ab­sence of mem­bers has prac­ti­cally sus­pended this func­tion of the board, said a source.

An­other ef­fect of va­can­cies would be a de­layed de­ci­sion on the award of rights in the eighth round to build and op­er­ate city gas net­works in eight dis­tricts in Haryana, Goa, Puducherry, Ut­tar Pradesh and Ma­ha­rash­tra. PNGRB had in­vited bids in Novem­ber and is ac­cept­ing ap­pli­ca­tions un­til Fe­bru­ary 23, fol­low­ing which the bids are to be ex­am­ined and suc­cess­ful bid­ders awarded. An­other source said many other rou­tine ac­tiv­i­ties such as con­sul­ta­tions with stake­hold­ers on var­i­ous pro­pos­als are un­af­fected due to va­can­cies.

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