Lok Satta Party President Dr. Jayaprakash Narayan today demanded that the Andhra Pradesh Government build a gas grid on war footing to utilize the gas being tapped in the Krishna-Godavari (K-G) basin.
Successive Governments in the State had miserably failed in anticipating gas availability and taking measures for its utilization. In contrast, the Gujarat Government had not only joined in exploration efforts but also built a gas grid in anticipation of supplies.
In a statement, Dr. JP said that both the Government of India and the Government of Andhra Pradesh have taken the correct stand that all natural resources belong to people. The State, operating on behalf of people, is entitled to decide on the utilization of natural resources by fixing priorities. It is also justified in fixing the price in such a way that critical sectors like fertilizer and power get gas at a reasonable rate even as the producer is assured of a reasonable return on investments and the attendant risks.
Dr. JP pointed out that the gas being tapped in the K-G basin should be allocated to the fertilizer, power and domestic sectors in that order for sound economic reasons. The Government of India is expected to spend Rs.60000 crore on fertilizer subsidy during the current financial year. The subsidy burden will go down if fertilizer could be produced at lower rates with gas utilization. If the fertilizer prices go down, agriculture becomes affordable to farmers. Similarly, the cost of power generation could be brought down if gas is used as feedstock. As a result, State Governments can bring down their subsidy on power to agriculture and other sectors.
Dr. JP said that the demand for a lion’s share of the gas produced should go to the State in which it is produced is rooted in sound economics and robust common sense. Just as pithead thermal power stations are encouraged to cut down on wasteful coal transport to far off places, natural gas ideally should be utilized in the State in which it is tapped. As a result, the transport costs, which add up nearly 15 percent to the cost of natural gas, will do down. Since energy is not utilized to transport gas to long distances, pollution of the environment through energy generation is minimized to that extent. It may be recalled that there is tremendous pressure on India to join the fight against global warming.
Realizing these benefits, the 12th Finance Commission had recommended that at least half of the royalty the Government of India receives should be allocated to the State in which gas is tapped. (The Government of India receives 50 percent of the gas produced as royalty in kind).
“I am not demanding that Andhra Pradesh be allocated the entire gas since it is found in the State,” Dr. JP emphasized. The Government of India, the rightful owner, is entitled to consider balanced regional development for gas allocation.
Demanding that the Andhra Pradesh Government build the gas grid in two years shedding its years of criminal negligence, Dr. JP said that otherwise gas naturally finds its way to States, which are in a position to use it instantly. As of now, there are only two pipelines linking Visakhapatnam and Kondapalli and the other East-West line meant to take gas to Mumbai. The gas grid should be constructed in such a way that all present and potential industrial hubs are covered.
Dr. JP said the Gujarat Government and the private sector in partnership with the Government have built seven pipelines that straddle all the industrial hubs of Gujarat.
Jamnagar – Rajkot – Surendranagar – Ahmedabad – Kheda
Bhuj – Rajkot
Mehsana – Ahmedabad – Kheda – Vadodara
Godhra – Vadodara – Bharuch – Surat – Vasad
Godhra – Surat Surendranagar – Ahmedabad and
Himatnagar – Mehsana.
In addition, it has pipelines linked up with Mumbai and Delhi.
“The Gujarat Government built the gas grid with foresight and wisdom. In contrast, we are fighting and shouting in the Assembly day in day out ignoring all the important issues that have a bearing on the lives of 8.5 crore people,” bemoaned Dr. JP