Some More Indications of how RIL has purchased Petroleum Ministry. This time from an insider like Anil Ambani.
30 Jul, 2009 1627hrs IST PTI
NEW DELHI: Questioning clearance by junior oil ministry officials of the near four-fold hike in costs to Rs 45,000 crore for gas fields by Mukesh Ambani-led RIL, Anil Ambani on Thursday demanded a probe into the "huge scandal."
"I am deeply concerned that RIL's capital expenditure of nearly Rs 45,000 crore on KG-D6 fields as confirmed in Parliament by the petroleum minister and which is nearly 33% of India's total defence budget was cleared by a management committee..." he said in an e-mailed interview.
"The committee comprised of one junior level official each from the petroleum ministry and director general of Hydrocarbon and two representatives of the contractor (RIL)... talk about conflict of interest," he said, adding that any expenditure above Rs 150 crore by any arm of government goes to the Cabinet committee of economic affairs for approval.
Given the incredibly high stakes involved, the comptroller and auditor General and central vigilance commission should examine relevant facts and find out if capex was overstated, Anil said, pointing that budgeted expenditure of RIL for peak production of 40 mmscmd was only Rs 12,000 crore in 2004.
Anil alleged that petroleum ministry, particularly after the changes in 2006 (when Murli Deora took over as minister), was colluding with RIL in its quest to make "super-normal profits of Rs 50,000 crore" at the cost of power and fertiliser sectors.
Anil hoped that public accountability bodies like CAG and CVC will examine the facts as he feared that ultimately the users of gas would end up paying for RIL's capital expenditure.
Appropriate action should be taken "if indeed they (CAG/CVC) find that the capex has been over-stated, and as a result huge losses caused to the public exchequer and all end-users of the gas produced from KG-D6," he said.
He said the surge in capex has even surprised independent observers and the government could have lost over Rs 30,000 crore by this "gold-plating of costs".
On his dispute over gas supply with Reliance Industries, Anil said: "It is a huge scandal that at the price of USD 4.20, RIL wants to make super normal profits of over Rs 50,000 crore (10-billion dollar) - which will ultimately be paid for by hundreds of millions of end-consumers."
Anil, who wants gas for his group firm RNRL at USD 2.34 per mmBtu as per an MoU with RIL, said further that "RIL has a short term monopoly, and to perpetuate this monopoly, and earn disproportionate profits at the cost of the people, RIL is spreading misinformation in the public domain to ensure a higher price for its gas."
As per the Production Sharing Contract, RIL is entitled to "first recover its entire capital expenditure from the revenues from sale of gas, before even the government gets any meaningful share."
Anil also raised questions over prohibitively high transportation cots for KG-D6 gas, while suggesting a probe by power and gas sector regulators like PNGRB, CERC and SERC.
He said that pipeline networks in the country were operating on a cost-plus basis, and therefore, end-users from power and fertiliser sectors were, in effect, paying for the networks too.
"To my mind, there is a strong case to revisit the issue of transportation costs for KG-D6 gas, probably the highest in the world, by the PNGRB, the pipeline regulator. Presently, these are pegged at a prohibitive USD 1.25, or 30 per cent of the base gas price!
"Further, with new tax breaks recently announced, the entire cost of setting up the gas pipeline network has been allowed to be written off in the very first year -- a special and unique benefit not given to any other capital intensive sector. It is only fair that the benefits of these tax breaks be passed on, and gas transportation costs be brought down to near zero."
He expressed the "hope that the regulators in gas and power sectors such as PNGRB, CERC and SERC, would examine this aspect more carefully."
At RNRL's AGM earlier this week, Anil also pointed out that the gas transportation company was no longer owned by RIL and it had been sold to the promoters of RIL for a "princely sum of Rs 5 lakhs, and turned into a privately held company."
http://m.timesofindia.com/PDATOI/articleshow/4838079.cms
Loading...
Sunday, August 2, 2009
Subscribe to:
Posts (Atom)