Gas Authority of India Limited (GAIL) India is in talks with other state-run companies to take a common legal recourse in the controversial adjusted gross revenue (AGR) issue. GAIL is in discussions with Oil India (OIL) and Power Grid Corporation (PGCIL) refgarding this.
Earlier this month, the Supreme Court (SC) directed the transmission major to approach the appropriate forum regarding the issue. The Department of Telecommunication (DoT) had raised a demand of Rs 1.83 trillion from the company towards annual licensing fee, including interest and penalty of AGR.
If the amount has to be paid, it will significantly affect the Rs 1 trillion capital expenditure plan the company has lined up for the next five years. “We are hoping that we will not have to pay the money,” said Manoj Jain, chairman and managing director of the company. The companies are yet to decide on the legal options, including approaching the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT).
Around 50 per cent of the capacity expansion that the company has lined up will involve the transmission business, for which the government is already working on a proposal to come up with a separate subsidiary. “We have lined up investments to the tune of around Rs 1 trillion for the next five years — out of which around Rs 50,000 crore will be on transmission business, Rs 10,000 crore will be going towards the petrochemical business and Rs 40,000 crore for its joint venture expansions,” he said. GAIL is looking to double its revenue and increase profits by 1.5 times by 2025.
Jain said that the government is working on a proposal to come up with a 100 per cent subsidiary for transmission and the new entity will be in place within a year “once the Cabinet nod is in place for the same.”