Govt to provide Rs5,176 cr fund support to GAIL's eastern gas grid project

The Cabinet Committee on Economic Affairs (CCEA) today approved viability gap funding or partial capital grant at 40 per cent - amounting to Rs5,176 crore of the estimated capital cost of Rs12,940 crore - to GAIL for development of the 2,539 km long Jagdishpur-Haidia and Bokaro-Dhamra Gas Pipeline (JHBDPL) project.

The development of the JHBDPL project will help connect the eastern part of the country with the National Gas Grid.

It will ensure the availability of clean and eco-friendly fuel, ie, natural gas to the industrial, commercial, domestic and transport sectors in the states of Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal. This capital grant will encourage the supply of eco-friendly fuel at affordable tariffs to industries and will encourage industrial development in these states, an official release stated.

Further, the CCEA has approved the simultaneous development of city gas distribution (CGD) networks in cities such as Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneswar, Kolkata, Cuttack etc en-route of JHBDPL project. These distribution networks will be developed by GAIL in collaboration with the concerned state governments.

It will bring clean cooking fuel at the door step of domestic households as well as provide clean fuel to transport sector in the eastern region. About 12.5 million people living in these cities will be directly benefitted by the establishment of these CGD networks. All these projects will generate direct as well as indirect employment for about 21,000 people and will boost socio-economic development in the eastern part of the country, says the release.

Cabinet earlier had approved the revival of three fertiliser units (FCIL- Gorakhpur, HFCL- Barauni and FCIL-Sindri) along the route of this pipeline project. On revival, these units will be the anchor gas customers for JHBDPL project and gas to these plants will be supplied under the Gas Pooling Scheme for urea sector at pooled price.