Gas utility GAIL scales down capital expenditure

January 29th, 2009 - 5:28 pm ICT by IANS  

New Delhi, Jan 29 (IANS) State-run gas utility GAIL India has scaled down its capital expenditure to Rs.55 billion (Rs.5,500 crore) for 2009-10 after the Planning Commission objected to the higher estimate prepared earlier, the company said here Thursday.”Our capex was originally Rs.7,000 crore (Rs.70 billion), which we submitted to the Planning Commission for approval. But after its objection, this has been revised to Rs.55 billion,” GAIL director (finance) R.K. Goel told reporters.

The capital expenditure for this fiscal is Rs.32 billion, but GAIL will not be able to meet the target; Rs.20 billion has been spent till December, while the the next three months will account for only Rs.5 billion, implying a Rs.7-billion shortfall in expenditure.

“We will fall short of the target, so that may be the reason for the Planning Commission doubting our ability to spend the money,” Goel said.

Part of the capital expenditure for the next year will be funded through borrowings from the Oil Industry Development Board.

GAIL’s third quarter net profit declined 59.22 percent to Rs.2.53 billion this fiscal from Rs.6.21 billion registered in the year-ago period.

However, the company’s total income rose to Rs.60.46 billion during the period under review from Rs.44.83 billion in the corresponding quarter last year.

In another significant decision, the GAIL board has decided to set up an empowered ethics sub-committee.

The committee will consist of the four independent directors and one of the two government nominees on the board, said GAIL chairman U.D. Choubey.

“Some of the aspects to be covered by the ethics committee include no conflict of interest, fair play, integrity and accountability, protection of corporate interest and its assets, transparency in disclosures in revenue, expenses and investments etc., legal compliances, propriety and confidentiality,” said a press release.

The committee will be in addition to the audit committee that is is already in place.

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