India Against Corruption (IAC) member Arvind Kejriwal on Wednesday accused both the UPA and the NDA governments of favouring Reliance Industries over pricing of gas from the KG basin to state-owned power plants. IAC also questioned the role of Prime Minister Manmohan Singh in the matter and alleged that the transfer of Jaipal Reddy from the oil ministry was part of the collusion between the government and the business house.
According to Kejriwal, the KG basin contract was awarded to RIL in 2000 by the then NDA government when it agreed to supply gas to the National Thermal Power Corp (NTPC) for the next 17 years at $2.5 per unit of gas. “But RIL revised the rate to $4.25 per unit in 2007 which then finance minister Pranab Mukherjee agreed to as the head of an EGoM,? Kejriwal said.
Kejriwal claimed the company wanted the rate to be further hiked to $14.25 per unit, a move opposed by former oil minister Jaipal Reddy. As a result, Reddy was shunted out, Kejriwal alleged.
Denying the allegations, RIL said, “The statements made by IAC are devoid of any truth or substance. The deep water exploration project in the KG-D6 basin has deployed the best technical resources and has been recognized by the oil and gas industry as one of the very best in its class.? This project has added great economic value to the country and by all accounts is a project of which India can be justly proud. Irresponsible allegations made by IAC at the behest of vested interests without basic understanding of the complexities of a project of this nature do not merit a response”.
Kejriwal blamed the PM for favouring RIL.
On its part, IAC member and lawyer Prashant Bhushan said the PM was acting under corporate pressure. “And that is the reason he’s showing so much interest in the matter”, he said.
In an official statement, IAC said: “When RIL failed to meet its production targets, Reddy decided to disallow their capital expenditure. In the first instance, a notice for disallowance of $1-billion expenditure was sent to RIL. This would mean a loss of $2.2 billion (R11,000 crore) to RIL, if we consider investment multiple (IM) ratio. Next year, this disallowance could be $ 1.5 billion, which would mean a loss of $ 3.3 billion (R16,500 crores) for RIL. That is the reason why Mukesh Ambani got restless and Reddy was transferred out.?
