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GAIL's monopoly bites-II: Who will break it up?
Nov 16: The figures go to show a big vested interest on GAIL's part in retaining its monopoly over the transmission network.
8There is a clear conflict of interest here, as GAIL's network is the backbone of India's gas transmission infrastructure and yet the same company uses up to 80% of this capacity.
8There are many examples of how GAIL pressurizes its customers into one sided gas sales agreements.
8A recent complaint filed with the PNGRB speaks of shocking highhandedness by the public sector gas major with its customers.
8Then again, other gas suppliers speak of how GAIL creates all kinds of entry barriers, including direct and indirect sops, to retain existing customers when a competitor reaches out to them. The informal waiving of Take or Pay conditions for customers when another supplier comes knocking is a way to keep a customer away from a competitor who cannot afford to waive that clause.
8"Most of GAIL's marketing policies are monopolistic in nature and violate competitive principles but such is the terror unleashed by this monopoly supplier of gas on consumers that most choose to stay quiet than to speak out," a big gas buyer told this website.
8The views of the Modi government on breaking up GAIL into its transmission and marketing arms are not known.
8GAIL recently got an infusion of government funds to build the trunk Jagdishput-Haldia pipeline. This is an argument often used by GAIL to silence its critics: that it builds pipeline infrastructure in places where others will not go.
8But this argument is specious, at best, for GAIL is a corporate entity driven by profit as much as its competitors are. It will never lay a pipeline that does not provide for a positive NPV.
8The sooner GAIL's monopoly is broken up, the better it is going to be for India.
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