The reported assurance by Union Petroleum Minister M. Veerappa Moily to Chief Minister Oommen Chandy in New Delhi on Monday that the Centre will provide Rs.100 crore for the Kerala State Road Transport Corporation (KSRTC) to set up compressed natural gas (CNG) stations has been welcomed as a measure that will benefit the corporation in the long run.

However, the immediate prospects of the corporation using CNG depend on the corporation finding the money to convert diesel bus engines to use natural gas and preparing the buses to use twin fuels in preparation for facing an emergency situation.

Former Transport Minister Thomas T. Mathew said that the Union government had not responded positively to proposals for sustaining the transport corporation in the long run and pointed out that converting the bus engines in 2006 would have cost around Rs.5 lakh a bus. Finding the money for the conversion work would be difficult for the corporation as it is in the grip of a serious financial crisis, he said.

Industry experts agree that switching to CNG will be good for the KSRTC in the long run.

Even if gas is made available at the current landed price in India of $15 (Rs. 825) per MMBTU (a standard unit of measurement for natural gas), it will compare well with diesel at the international rates though the cost of conversion of bus engines will be a huge burden on the transport corporation. KSRTC sources said that corporation will also have to look at the number of buses that may be converted, given the constraints of supplying CNG in different places across Kerala. The corporation owns over 5,500 buses of which 2,000 may be converted given their conditions.

Conversion to gas and establishment of CNG stations will take between one to two-and-half years, given the type of infrastructure needed.

Added to this will be the delay faced by the Gas Authority of India in laying the pipeline between Kochi and Mangalore, which will make gas available in seven districts between Erakulam and Kasargod.

This is in addition to the 40-km pipeline already available in different parts of Kochi, which have been linked to the five-million-tonnes-a-year LNG terminal on Puthuvype island.

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