New Delhi, Sep 7 : Apart from the new ‘Force Majeure’ (FM) guidelines, the Petroleum and Natural Gas Regulatory Board may allow for a “restoration period” to city gas distribution (CGD) companies to resume project execution, ratings agency ICRA said on Monday.
Lately, several city gas firms declared FM for delays in meeting completion targets, as work got stalled due to lockdowns, but such claims could not be immediately accepted by the regulator in the absence of guidelines listing the events that can trigger FM.
On September 2, the PNGRB issued a fresh set of guidelines, to examine the requests of CGD players for time extension on account of FM events.
Subsequently, the guidelines lists events such as war, riots, natural disasters, and restrictions by the Central or state governments as conditions that qualify under FM and can result in time extension to complete ‘Minimum Work Programme’ (MWP) obligations.
The guidelines indicate that the PNGRB would consider each player’s claim on a case-to-case basis depending on the extent of impact in that particular region.
“PNGRB may also further allow additional restoration period after the determination of the event of FM for restoration of the activities,” the ICRA statement said.
“The difficulties for CGD players associated with re-mobilisation and availability of equipment, labour and other resources to resume project execution could be covered under this restoration period and would be additional relief to entities executing new projects.”
Besides, the guidelines clarified that any delays occurring due to delay in securing permissions from statutory, local or other authorities of any government cannot qualify as FM, as this is the prime responsibility of the CGD entities.
“This will ensure that players will not be able to cite other operational delays in execution as a FM event. For time extension on such operational delays, the CGD will continue to have to represent to the regulator separately,” the statement said.
Under the present regulations, CGD players have MWP obligations for each year in terms length of pipelines, number of CNG stations and the number of domestic connections to be completed.
In addition, delays in execution permit imposition of penalties on the entities setting up the projects.