GAIL (India) Ltd may abandon the Tamil Nadu portion of the Kochi-Koottanad-Bangalore-Mangalore natural gas pipeline if the State Government does not take a decision on the project within a month.
“The matter was discussed at the board meeting. We will wait for one more month and then the board will take a call on abandoning the project,” said B.C. Tripathi, Chairman, after announcing the April-June quarter numbers.
Though he did not put any figure to the amount GAIL would lose if it abandons the project, Tripathi said: “The concern is that even if we win the case (the matter is in the Madras High Court), ultimately it is the support of the State Government that is needed to implement the project.”
GAIL has faced resistance from farmers while laying the gas pipeline, which traverses seven districts in Tamil Nadu — Coimbatore, Tirupur, Erode, Namakkal, Salem, Dharmapuri and Krishnagiri — over 310 km.
Farmers apprehended that the pipeline would result in a loss of agricultural production in future.
Following the protests, the Tamil Nadu Government declared that GAIL would have to stop laying the pipeline across farmers’ fields and instead align it with highways.
On Thursday, GAIL reported a 28.71 per cent decline in its net profit for the April-June quarter on higher costs, despite registering a 16 per cent increase in income.
Net profit for the quarter stood at Rs 808.17 crore (Rs 1,133.78 crore).
Total income for the June quarter rose to Rs 12,899.80 crore from the corresponding last quarter’s Rs 11,122.35 crore.
Following the results, the GAIL scrip ended a tad lower on the BSE at Rs 328.60.
Revenue from natural gas trading was up 20 per cent during the quarter at Rs 11,059 crore (Rs 9,242 crore). Earnings from the petroleum business almost doubled to Rs 1,103 crore, while natural gas transmission revenues were up by about a tenth, at Rs 999 crore.
Net sales from the LPG (liquefied petroleum gas) and liquid hydrocarbon business during the quarter stood at Rs 1,004 crore, marginally lower than the Rs 1,072 crore in the corresponding last quarter. LPG and other liquid hydrocarbon sales rose nine per cent to 3.5 lakh tonnes from 3.22 lakh tonnes.
Polymer sales surged 83 per cent to 1.21 lakh tonnes during the quarter against 66,000 tonnes in the corresponding period last year.