My understanding in that tariff decline by ~50% (Rs 34 to Rs18) will completely wipe out profitibility of GSPL.
From PNGRB perspective, its clear that their incentive to provide customer services at cheapest tariffs, and as long as GSPL survives/does not break , they are fine.
Something that I am trying to understand here:
What incentive do GSPL management has to fight with low tariff order by PNGRB? My understanding is that , with largely fixed compensation, enhancing profitibility of GSPL will not be driving force for GSPL management.
The promoter of GSPL is again governed by government of Gujarat, with hardly any incentive to drive profitibility of GSPL. As long as GSPL continue to discharge its tasks (maintining pipepline) and does not break, the promoter should be fine.
So, who is going to fight any adverse impact on GSPL when promoter and management do not have any incentive to do so. Is there any other influential shareholder (Institutional shareholder) who has high stake in GSPL and hence the incentive to influence management and government and take steps to fight PNGRB orders?
Please suggest?
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