Appeals in gas supply bids rejected

The Supreme Court last week dismissed the appeals of Adani Gas and IMC against the decision of the Petroleum and Natural Gas Regulatory Board in the bidding for distribution of natural gas in four south Indian districts. The appeals arose over the grant of authorisation for laying, building, and operating or expanding the distribution networks in Chennai, Puducherry, Kanchipuram, and Tiruvallur districts. The challenge was taken to the Appellate Tribunal for Electricity, but the panel gave a divided verdict, the chairman and the technical member giving reaching opposite conclusions. The matter was referred to the judicial member but he recused and there was no replacement for him. Therefore, the Supreme Court had to decide the dispute under its extraordinary powers. The board has to give authorisation to any entity which undertakes to operate natural gas distribution work. The rules were amended in 2018 to introduce new criteria, leading to the current dispute. Rejecting the contentions of the gas companies, the court observed that the assessment of the reasonability of the bid was a matter solely between the highest bidder and the board. The sole question, the judgment said, was whether the highest bidder’s quote was reasonable. The power to determine such reasonability resided solely with the board. The presence and hearing of other bidders are not necessary. The assessment of the board would not alter the scores of the highest bidder visà-vis the scores of the other bidders.