Government fixes new charges for laying Gail gas pipelines

Rs 1,200 per metre for ground and road-cutting work

 The State government has resolved the issue of charging ground and road-cutting charges for laying gas pipelines under the City Gas Distribution (CGD) project in Bengaluru. It has fixed Rs 1,200 per metre as charges to the Gail Gas Limited, which is implementing the project.

In a meeting chaired by Chief Secretary Kaushik Mukherjee recently, the Bruhat Bangalore Mahanagara Palike and the Bangalore Development Authority (BDA) were directed to charge a flat rate of Rs 1,200 per metre .

The BBMP had earlier fixed Rs 2,200 per metre, which the Gail Gas Ltd was not ready to accept as it was much higher than what the Optical Fibre Cable (OFC) companies pay to the civic body, that is Rs 850 per metre, officials sources said.

The sources said the government reduced the price as it realised that higher ground and road-cutting charges may jack up the cost of gas to the consumers after the project is commissioned.

Gas price to the consumers will be determined on various factors, including basic price of gas, transportation cost, capital cost of laying pipeline and taxes imposed by the State government.

The Gail Gas Ltd has drawn up a plan to lay 300 km of gas pipelines in BBMP limits and 200 km in BDA limits. The project envisages supply of Piped Natural Gas (PNG) to all households and Compressed Natural Gas (CNG) for commercial and industrial use. The CGD will be implemented in both Bengaluru Urban and Bengaluru Rural districts in a phased manner.

Gail Gas to restore roads

The charges fixed by the government for CGD project is higher when compared to OFC companies as laying gas pipeline results in extensive damage to roads. The Gail Gas Ltd has taken the responsibility to get the damaged road restored after laying the pipelines.
So far, Gail Gas Ltd has sought permission to lay 60 km of pipeline from the BBMP (42 km) and the BDA (18 km) and deposited about Rs 66 lakh, the sources said.

However, the government has not yet taken any decision on a request by the Gail Gas Ltd to waive of entry tax and value-added tax on petroleum products. The Gail Gas Limited is a subsidiary of Gas Authority of India Limited (GAIL), which is a Central Public Sector Undertaking.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has awarded the contract to Gail Gas Ltd to establish and maintain CGD network covering about 263 km of pipeline in the two districts for next 25 years, including supply of piped gas to all households.

As per the minimum work programme calendar drawn up by the PNGRB, GAIL Gas Ltd has to cover five per cent of total estimated households within five years of commencement of the project.

Bengaluru Urban and Bengaluru Rural districts have an estimated 20 lakh households.