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Next round of city gas bidding to cover over 300 districts: Satpal Garg, member of PNGRB

Regulator mulling introduction of substitution rights to lenders within the first five years. It enables them to replace the concessionaire with a different entity, subject to the approval of the concessioning authority

March 31, 2021 / 01:27 PM IST

The Petroleum and Natural Gas Regulatory Board (PNGRB) may cover the entire country at one go in the upcoming round of city gas distribution (CGD) bidding that may happen within six months.

Satpal Garg, the sole member of PNGRB at present, told Moneycontrol in an exclusive interview that plans are afoot to cover over 300 districts in the eleventh round of CGD bidding, which may get its final shape once new members join the board.

“The proposal will be taken up for consideration once the quorum is full in PNGRB. The groundwork is almost ready, it may happen within six months. For the ninth and tenth rounds, financial closure is done in most of the areas,” Garg said.

The ninth round covered 86 specified geographical areas (GAs) and 174 districts, while the tenth round had 50 GAs and 124 districts.

The number of GAs that will be part of the upcoming round is yet to be decided. However, the round is expected to see an investment of around Rs 1.2 lakh crore, Garg added.


After the completion of the ninth and tenth rounds, CGD will be available in 406 districts across the country.

Plans new regulations

The regulator may also look at introducing substitution rights to lenders within the first five years. This right of substitution enables the lenders to replace the concessionaire with a different entity nominated by them, subject to the approval of the concessioning authority.

It can happen if the concessionaire defaults on any concession or financing agreements. PNGRB is exploring this option because companies were facing problems related to financing in the post-COVID situation.

“Companies are facing problems in getting finance now as the existing regulations do not allow transfer of GAs to another party in the first five years. To tide over this, lenders are asking for substitution rights,” Garg said, adding that the regulator will take a call on this as well, once a new member joins.

This will be a huge boost for companies that participated in the ninth and tenth rounds of CGD bidding. Investment to the tune of around Rs 70,000 crore is expected in the ninth round and Rs 50,000 crore in the tenth round.

Oil ministry to take a call on TSO  

In the Union Budget 2021-22, Finance Minister Nirmala Sitharaman had announced the setting up of a transport system operator (TSO). The move is aimed at ensuring that pipeline facilities will be partly available in the open market so that anyone can book space in a pipeline.

When asked about his views on TSO, Garg said, “It may be a 51 per cent government-owned company or may also model Power System Operation Corporation (POSOCO) in the power sector, which is a 100 per cent government entity. If it is 51 per cent, some PSUs can pick up the remaining stake. The Ministry of Petroleum and Natural Gas (MoPNG) will be coming up with the proposal in this regard. Our role will only be regulating the allocation of capacity.”

POSOCO is a wholly-owned subsidiary of the Power Grid Corporation of India.
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