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GAIL, BPCL and Delhi govt form JV for CNG distribution in Delhi

More than 231,00 households, 2,500 commercial establishments and 50,000 vehicles in Delhi will be provided with compressed natural gas, which is much cheaper than liquefied petroleum gas within the next five years.

Gas Authority of India Limited Chairman C R Prasad said in New Delhi today that a joint venture -- Indraprastha Gas Limited -- had been incorporated for distribution of CNG in Delhi.

GAIL, BPCL and the Delhi state government will have equity stake in the new company which will have an initial investment of Rs 5.36 billion; Rs 1.4 billion will be in the form of equity and the rest will be debt and non-refundable deposits from consumers.

The debt-equity ratio has been fixed at 2:1. GAIL and BPCL have taken 22.5 per cent equity each and 50 per cent equity would be offered to financial institutions and others. It is not clear how much stake the Delhi government will pick up.

SBI Capital Markets Limited had been appointed financial advisor while technical consultancy would be provided by Gascor Consultants International of Australia.

Based on a techno-commercial survey being conducted by IGL, an underground medium pressure or low pressure pipeline would be laid in phases to cover entire Delhi, Prasad added.

Prasad said domestic consumers would be required to deposit Rs 6,000 for availing the facility, including laying of pipeline and meters. They would be charged on the basis of meter reading, he added.

In the second phase, IGL planned to extend the facility to 750,000 households. Gas would be clean, cheap and benefit a large number of consumers in Delhi for the next 40 to 50 years.

As per the Supreme Court directive, all commercial vehicles in Delhi must use CNG and other such eco-friendly fuels by March 2002. To ensure adequate availability of CNG to vehicles, IGL would increase the number of outlets from nine to 80 by March 2002 in Delhi. The cost of material and equipment for these retail outlets would be Rs 800 million, he said.

The cost of conversion of the existing vehicles to CNG would be Rs 30,000. GAIL had prepared a list of the companies which could help the vehicles run on CNG on a one-time payment.

UNI

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