The Petroleum and Natural Gas Regulatory Board (PNGRB) has rejected Adani Gas Ltd’s application for an authorization to retail CNG to automobiles and piped natural gas to households in Jaipur and Udaipur, concluding the noncompliance with regulations for a license.
As order says, “In November 2005, Adani Gas bid for setting up the city gas distribution (CGD) network in Udaipur and Jaipur, in response to an invitation of Rajasthan government. On March 20, 2006, the state government gave a no objection certificate to the company, subject to certain conditions. The same month Adani Gas deposited the commitment fee of Rs 2 crore. Later in October 2007, PNGRB was appointed as the regulator of the sector by the central government and the PNGRB sought application from companies operating CGD networks.
On March 31, 2008, PNGRB issued a notice to Adani Gas for not having the requisite authorization from the central government. On August 28, 2008, the company submitted separate applications for authorization for Jaipur and Udaipur. On May 18, 2011, the NOC given to the Adani Gas was withdrawn by the Rajasthan government. Further, on May 19, 2011, PNGRB rejected Adani Gas’ application for both the cities.
The company challenged the decision of PNGRB before Rajasthan High-Court, which got dismissed. It then appealed to the Supreme Court. In the docility to the Supreme Court order, a personal hearing was held by PNGRB with Adani Gas representatives.
After the hearing, in a 23-page order on February 28, 2019, PNGRB gave detailed reasons for rejecting Adani Gas Ltd’s (AGL) claim of having ‘deemed authorization’ to operate a CGD network in the two cities before the existence of the regulator. “Adani Gas meets the minimum eligibility criteria but did not comply with the requirement of making committed investments and physical progress in the rollout of CGD network in both the cities. Also, it had not tied up gas for supply through the CGD networks,” said PNGRB.
“No documentary evidence has been presented by Adani Gas to show the massive expenditure it has supposedly incurred on the project,” said PNGRB in reply to the company’s claim of having made a substantial investment in the two cities.