Thursday, November 1, 2012

Why prop up RIL and let down NTPC, Kejriwal asks Manmohan

NEW DELHI, November 1, 2012

India Against Corruption alleged on Wednesday that Prime Minister Manmohan Singh was batting for corporate houses, and the PMO was very "sympathetic" to Reliance Industries Limited's demand for a revision in the gas price.

"RIL's request for an increase in the gas price was turned down by the Petroleum Ministry under the leadership of Jaipal Reddy and the Empowered Group of Ministers (EGoM) during the past two years. The EGoM had fixed a price of $4.2 per Million Metric British Thermal Units (mmBtu) for RIL and others, valid till March 31, 2014. When Mr. Reddy refused to yield…, they [RIL] approached the Prime Minister, who was very sympathetic to their demand. The Prime Minister asked the Petroleum Ministry to seek the Attorney-General's opinion whether the gas price could be increased midway…" Mr. Kejriwal told a press conference.

He said it was strange that neither the Prime Minister nor his office showed the same concern for, and sympathy with, NTPC when the state-run company was forced to accept a higher gas price from RIL. "Why was the Prime Minister not pulling up RIL for not producing 80 Million Metric Standard Cubic Metre Per Day [mmscmd] gas as per the agreement? Why did the Prime Minister not seek the Attorney-General's opinion when the country's interests were at stake and RIL went back on its commitment to supply gas to NTPC at $2.4 per Million Metric British Thermal Units? Why was the Prime Minister showing so much interest when RIL's interests were at stake?"

He alleged that when RIL failed to meet its production targets, Mr. Reddy and his team of officials decided to disallow its capital expenditure. In the first instance, notice was sent to RIL for disallowance of $1 billion. This would mean a loss of $2.2 billion (Rs.11,000 crore) to RIL, if the interest multiple ratio was taken into account. Next year, the disallowance could be $1.5 billion, which would mean a loss of $3.3 billion to RIL. "Is this the reason why Mr. Ambani got restless…? The government seems to be succumbing to the illegitimate demands of some powerful corporate… Benefits given to RIL… contributed to the rise in the prices of power and fertilizers. On the one hand, the government says it does not have the Rs. 35,000 crore to subsidise LPG cylinders and on the other, it bends over backwards to provide benefits to such a corporate house."
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