New Delhi, Nov 05: Private sector firms have opposed government's move to nominate Gail to execute the Rs 20,000 crore national gas pipeline grid saying the state-run firm's steep construction cost may turn the prestigious project into another Dabhol. If executed by Gail, the 7,900-km criss-cross grid, which will be the only vehicle for all public and private sector firms to move the fuel from producing fields and import locations on east and west coast to inland demand centres, will cost 60 per cent more than similar projects being implemented worldwide, a representation to government said.
Gail's pipe procurement cost, according to private sector steel pipe maker PSL Ltd, is USD 930 per tonne as compared to 580 dollars per tonne cost of pipes in the gigantic west-east pipeline project in China.
Even Bangladesh procured gas pipes at USD 600 per tonne. Within India, state-run Indian Oil Corp (IOC) regularly procures oil pipes in the range of 650-700 dollars per tonne and recently Gujarat State Petronet Ltd procured gas pipes at internationally competitive price of USD 630 per tonne, psl said in its comments to the draft gas pipeline policy that mandated Gail for executing the national gas grid.
"(This) will result in a spiralling of cost for transporting gas, followed by higher cost of manufacturing goods, rendering the use of gas uncompetitive for end users. This will result in a Dhabol-like situation where the end product, ie. power, is not usable because of the extremely high input cost involved," BSE-listed PSL Ltd said.
Bureau Report