PNGRB orders MNGL to transfer CNG stations to private company

PNGRB has directed MNGL to transfer the assets of two of its CNG stations in Pune to Torrent Gas within three months
PNGRB orders MNGL to transfer CNG stations to private company
  • PNGRB has said that the two shations should be handed over to Torrent Gas because they are located outside of the geographical area (GA) limit awarded to MNGL

  • MNGL has claimed that negligible area of the two stations are outside its GA and that is because it was never given precise geo coordinates by the govt when GA was awarded

New Delhi: The Petroleum and Natural Gas Regulatory Board (PNGRB) has directed Maharashtra Natural Gas Ltd (MNGL) to transfer the assets of two of its CNG stations in Pune to Torrent Gas within three months, failing which MNGL will have to cease operations of these stations to avoid facing penal action. PNGRB Chairman DK Sarraf and Member Satpal Garg, in their order, have said that the two MNGL stations — M/s Balaji Petroleum, located on Pune-Ahmednagar Road, near Wagoli Area (operational since 2014) and M/s Abhay CNG Station near Fursungi on Pune-Saswad Road (operational since March 2016) — should be handed over to Torrent Gas because they are located outside of the geographical area (GA) limit awarded to MNGL. 

However, MNGL, on its part, has claimed that only 500 metres in the case of Balaji Petroleum and 420 metres in the case of Abhay CNG station can be said to be beyond its GA limit, which is negligible when compared to the authorised GA of 1,053 sq Km. It has also said that it was not possible for the company to assess the GA limit on the ground accurately since the Central government did not provide precise geo coordinates at the time of awarding the GA.

The PNGRB had issued four show cause notices dated February 14, to MNGL under Regulation 16(1) of CGD Authorisation Regulations, 2008, Section 46 and 50 of PNGRB Act, 2006 regarding violation of terms and conditions of authorisation and carrying out "unauthorised activities" beyond their authorised Geographical Areas by operating four CNG stations. 

Torrent Gas has claimed 2 more MNGL stations

The other two stations caught in the tussle between the two companies are — M/s Jai Ganesh Petroleum, Urali Devach (operational since December 2015) and NRO Sus, Sus Gaon (on verge of commissioning shortly). For these two stations, the PNGRB has told MNGL to conduct a joint assessment of the locations along with Torrent Gas and submit the report along with exact geo-coordinates to the Board. 

Torrent Gas has sought the possession of these two stations as well on the grounds that they fall within the GA awarded to the company. In its response, MNGL has claimed that only the boundary wall of one of the stations and about 4-metre-area of the other station is outside the GA limit of MNGL.

MNGL: Govt didn't provide precise geo coordinates at time of awarding GA

In its response to the show cause notices served by the PNGRB, MNGL has said, "At the time of the authorisation by the Central Government and submission of information to PNGRB, no map with Geo Coordinates was either prepared or given to MNGL. The boundaries were shown on a map without coordinates and were worked on rough basis rather than precise Geo Coordinates… Even though the GA is shown on a map, as there is no exact marking of the area of the ground, the physical demarcation of the geographical area is not possible at all."

"Further, whenever any overlapping in geographical area has taken place, the same has been permitted by the Board," MNGL has added.

MNGL: Commissioned 2 CNG stations before PNGRB issued LoI to Torrent Gas

Referring to the two stations that are now to be handed over to Torrent Gas, MNGL has said that while the Balaji Petroleum CNG station was commissioned on January 31, 2014, much before the closing date of the 4th bidding round in which Torrent Gas submitted their bid, the Letter of Intent (LoI) for Abhay CNG station was issued on April 24, 2015 and initial PESO approval was received on May 15, 2015. "All the requisite permissions from various authorities were obtained prior to letter of intent issued by PNGRB to MaGL (now known as Torrent Gas) on 18.05.2015," MNGL has claimed.

"In the present case, admittedly MNGL never intended to set up any CNG Station beyond its GA and clearly the violation being complained off is itself on factual error (sic.), which is likely to happen on account of no demarcations on the ground. Not only the factual errors went unnoticed by MNGL, but also by Mahesh Gas (now Torrent Gas) and all other bidders in the year 2014 itself," MNGL has said.

On the basis of the directions issued by PNGRB, operations at Balaji Petroleum and Abhay CNG station have been stopped by MNGL since February 26 this year. 

Torrent Gas claims large no. of connections being serviced by MNGL in its area

In an e-mail dated September 8, Torrent Gas has told PNGRB, "MaGL (Torrent Gas) had requested MNGL to handover 2 CNG stations (Abhay and Balaji) that were clearly in MaGL's area in the best interest of the ultimate consumers." 

"Apart from the other two stations (NRO SUS and Jai Ganesh, Uruli Devachi), there are large number of potential Domestic, Industrial and Commercial connections that are being serviced by MNGL in the GA authorised to MaGL," Torrent Gas has said without elaborating on the number of these connections.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

PSU Watch