Govt mulls splitting GAIL may sell pipeline business

first_imgNew Delhi: The government is considering to split state-run gas utility GAIL (India) Ltd by hiving off its pipeline business into a separate entity and selling it off to strategic investors, sources privy to the development said. GAIL is India’s biggest natural gas marketing and trading firm and owns more than two-thirds of the country’s 16,234-km pipeline network, giving it a stranglehold on the market.Users of natural gas have often complained about not getting access to GAIL’s 11,551-km pipeline network to transport their own fuel. The sources said that to resolve the conflict arising out of the same entity owning the two jobs, bifurcating GAIL is being considered. Also Read – Maruti cuts production for 8th straight month in SepWhile previously selling of the marketing business, possibly to another state-owned firm, was being considered, the government is now mulling on hiving off the pipelines into a separate entity and selling off a majority stake in it, they said. GAIL has multiple long-term contracts to import gas in its liquid form (LNG) from countries such as the US and no strategic buyer would like to take the responsibility of those, particularly when the fuel is available at a cheaper price in the spot or current market, the sources said. Also Read – Ensure strict implementation on ban of import of e-cigarettes: revenue to CustomsThey said it is now being considered that GAIL continues with the marketing business that would include all the sale contracts as also city gas retailing. The pipeline business can be spun off into a separate company, where the government may divest a majority stake to a strategic investor such as Canadian asset management company Brookfield that recently bought a 1,480-km pipeline owned by Mukesh Ambani’s Reliance Industries (RIL). The sources said the strategic partner will operate the pipelines and give access on a non-discriminatory basis to any entity wanting to transport gas either from a natural gas field or an LNG import terminal to consumers. GAIL already keeps separate accounts for it’s gas pipeline and marketing businesses, making it easier to split them into two entities. By unbundling GAIL and opening the sector, the government hopes to increase gas use to 15 per cent of the energy mix by 2030 from current 6.2 per cent. When talk of splitting first started in January last year, Oil Minister Dharmendra Pradhan had stated that GAIL should focus on laying pipelines, suggesting hiving of the marketing business. The sale of a stake in pipeline business would help the government meet a part of its Rs 1,05,000 crore target for raising revenue from disinvestment in the year to March 31, 2020. Incorporated in August 1984 by spinning off the gas business of ONGC, GAIL owns and operates over 11,500-km of natural gas pipelines in the country. It sells around 60 per cent of natural gas in the country. The sources said the oil ministry has not been very happy with GAIL’s performance in building pipeline network. Besides, there is a possible conflict of interest in its role as an infrastructure provider and carrier. GAIL did not start executing the Rs 12,940 crore Jagdishpur-Haldia and Bokaro-Dhamra pipeline until the government agreed to give 40 per cent of the project cost as a grant from the budget. The pipeline takes the gas to Prime Minister Narendra Modi’s constituency, Varanasi. Plans to split the company had been discussed more than a decade back too but it did not materialise. The sources said refiners Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) had in 2017 evinced interest in acquiring GAIL to expand their gas marketing business.last_img read more

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Alarmed by intensified clashes in Liberia Annan calls for protection of civilians

Mr. Annan is troubled not only by the severe effect the intensified fighting is having on the Liberian capital’s more than one million inhabitants, he is also concerned that clashes on the city’s western edge have caused the majority of an estimated 100,000 displaced people in camps there to flee for their safety, according to UN spokesman Fred Eckhard.Thousands have moved to the central and eastern parts of the capital, Mr. Eckhard added, noting that before fighting erupted around Monrovia on 5 June, humanitarian workers had access to barely 30 per cent of Liberia. “Today, virtually none of Liberia’s more than 3 million people, already traumatized by years of war and abject poverty, will be able to receive emergency relief assistance,” he said.Along with his call for civilian protection, the Secretary-General also urged the parties to prevent looting of humanitarian assets and property. “Finally,” Mr. Eckhard said, “he reminds them that perpetrators of international humanitarian and human rights law violations, which have been far too common in Liberia, will be held accountable for their acts.”Meanwhile on the ground, the Secretary-General’s Representative for Liberia, Abou Moussa, continues to engage informally with the parties to the Liberia peace talks underway in Ghana. The talks are expected to begin fully on Wednesday, when the political delegation of the Movement for Democracy of Liberia (MODEL) is expected to join the meeting.The spokesman said that earlier today in Monrovia, the intensified fighting has forced 29 UN international staff, together with European Union nationals, to be taken out of the city to a French ship waiting off the coast.Over the weekend, the head of the UN Children’s Fund (UNICEF) pleaded for the safety of the country’s children, whom she feared were being swept up in Liberia’s ongoing civil unrest.”As heavy fighting forces thousands of civilians to flee the shelter of camps on the outskirts of Monrovia, we are deeply troubled about the plight of Liberian children and the civilian population caught up in the mayhem,” UNICEF Executive Director Carol Bellamy said, calling on the warring parties to protect children from harm.UNICEF said that the current fighting has only exacerbated the collective effects of years of displacement and social insecurity, which have left the Liberian economy and basic social services devastated, and the employment rate at about 85 per cent. After nearly 14 years of conflict, most teenagers have no idea what it means to live in peace. Listen to UN Radio report read more

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