Natural gas projects hit due to fund crunch

HURDLES Infrastructure in place but transfer deals pending

JAIPUR: The state government’s ambitious plan for building natural gas infrastructure for domestic and industrial use have been slow to take off due to fund shortage, sources said.

The government has drawn up plans to supply natural gas for industrial clusters in Alwar, Jhalawar, Baran and Bhilwara districts, apart from domestic piped gas in cities of Jaipur, Kota, Udaipur and Ajmer. The government has set up CNG filling stations on the Jaipur-Delhi highway and a CNG mother station in Neemrana, but other projects have been delayed.

For example, entire infrastructure is in place in Kota, but the city gas project is stuck due to delay in signing of business transfer agreement (BTA) between the Gail Gas Ltd and the Rajasthan State Gas Ltd (RSGL).

Gail Gas Ltd is a subsidiary of the public sector company Gas Authority of India Ltd and RSGL is the state-authorised nodal agency to build retail gas infrastructure in the state.

“In case of Kota, the project to supply piped natural gas for domestic purpose will move forward once the business transfer agreement between Gail Gas Ltd and RSGL is signed,” said an official, who did not wish to be named. “However, the bigger issue here is that until the BTA is signed, RSGL will not be in a position to take up the project activities as per the blueprint prepared for catering demand in adjoining areas of Kota. Moreover, the construction activity for identified CNG stations on Kota-Jaipur and Kota-JhalawarDewas-Mumbai routes will be taken up after transfer of city gas distribution assets of Kota to RSGL,” he said.

The crux of the issue is commitment of equity infusion of ₹40 crore by the state government for taking up requisite project activities for city gas distribution in Kota. The BTA has been delayed even as the Petroleum and Natural Gas Regulatory Board (PNGRB) had granted no objection certificate to the Gail Gas Ltd for transfer of its city gas distribution licence for Kota in favour of RSGL way back in 2015, following which RSGL had signed an MoU with the state government for developing natural gas infrastructure.

When contacted, RSGL managing director Ravi Agarwal said, “Once the commitment of equity funds by other promoter company RSPCL (Rajasthan State Petroleum Corporation Ltd) is ensured, the business transfer agreement between RSGL and Gail Gas Ltd will be signed. The blueprint for catering to demand in adjoining areas of Kota and for establishing proposed inter-CNG corridor on Kota-Jhalawar-Dewas–Mumbai route is in place.”

While residents in Kota will get piped gas once the agreement is signed and RSGL takes over the project from Gail Gas Ltd, residents of other designated smart cities – Jaipur, Udaipur and Ajmer – will have to wait for a longer time, as no pipeline infrastructure is in place due to lack of industrial demand in the region.

“It’s a classic chicken and egg situation. Unless there is industrial demand, the gas projects will not come up and unless the industry has access to clean and cheap fuel, the units will not come,” said the official.