Even as RIL mounts its counter offensive against RNRL with a series of letters to the oil ministry debunking ADAG claims on hoarding of KG Basing gas, it needs to look at itself in the mirror and check whether is weel vis a vis lies and more lies. CAG has rejected the audit meet records, saying that the oil ministry is circulating details sans its views on expenses by RIL. After DGH V K Sibal put out a release on his website on August 5 saying that CAG had completed its audit of RIL's Andhra offshore field costs which proved to be false, the battle has escalated. The very next day CAG denied this saying that it had problems accessing papers of private firms. This led to red faces both in DGH and oil ministry. One doubts whether Mukesh Ambani is ever red faced or embarrassed about anything.
Now CAG has accused the oil ministry of circulating records of two crucial meetings without its concurrence or confirmation on the issue of auditing the expenses incurred by private companies, in developing oil and gas fields. CAG's principal director of audit has slammed the records sent on August 24, telling the ministry that they do not fully reflect the discussions that took place or take into account the government's auditors prerogative and views.
Expressing reservations over the record on RIL's field, the CAG latter said, "The understanding of our audit team was that during the meeting, the contractor's representative expressed considerable reluctance to provide access to records for the previous years till 2006-07 and no dates for the entry conference were discussed or decided during the meeting... such a conference will have full purpose only when we have documented clarity about our exact audit access. So far we have not received any such written confirmation of such access."
Despite RIL's protests over everything being above board as far as KG D6 fields capital expenditure development plans not being gold plated, it is clear that it continues to obstruct and obfuscate CAG's attempts to get to the bottom of the case. Will truth reveal itself?
Sunday, August 30, 2009
Thursday, August 27, 2009
Sc hearing deferred
Just when everyone thought that the Ambani gas opera will provide more girst for their mills, the Supreme Court has deferred the hearing of the controversial case to October 20. On Friday, a bench headed by chief justic K G Balakrishnan decided to pose the matter for October after RIL counsel suggested the matter be heard on October 20. With RNRL counsel Mukul Rohatgi agreeing, the matter has been deferred.
Till yesterday, the war of missives continued unabated with both RIL and RNRL dashing off letters. With advertisements having stopped, RNRL asked the oil ministry why it was not protecting NTPC's claims, given that it was a government company and as such should have been covered under 'national interest'? This is the plea that the oil ministry has strangely taken in the RIL-RNRL case, but has taken a subjective view in the NTPC case where its claim of 12 million units per day for 17 years and $2.34 has not been taken seriously by the government.
In any case, the hearing could not have taken place on September 1, the originally designated date as the CJI is busy with a five member Constitutional Bench till the first week of the month. Expect more fireworks in media in the meantime, for the battle between the fraternal brothers will only escalate now.
Till yesterday, the war of missives continued unabated with both RIL and RNRL dashing off letters. With advertisements having stopped, RNRL asked the oil ministry why it was not protecting NTPC's claims, given that it was a government company and as such should have been covered under 'national interest'? This is the plea that the oil ministry has strangely taken in the RIL-RNRL case, but has taken a subjective view in the NTPC case where its claim of 12 million units per day for 17 years and $2.34 has not been taken seriously by the government.
In any case, the hearing could not have taken place on September 1, the originally designated date as the CJI is busy with a five member Constitutional Bench till the first week of the month. Expect more fireworks in media in the meantime, for the battle between the fraternal brothers will only escalate now.
super charged NTPC
Just when poor NTPC claims in the gas opera were being cast aside due to the oil ministry's ambivalent attitude towards the power ministry, the governemnt law officers were given a wake up call by an emboldened NTPC CMD R S Sharma. Threatening to walk out of a high profile briefing session, Sharma made it amply clear to one and all in the room on the company's interlocutory petition to be filed in the SC.
Sharma was furious with the draft petition, saying that it did not safeguard NTPC's concerns on the issue of protecting future gas supplies from RIL. Times of India has reported that Sharma put his foot down on the sensitive issue. NTPC will not be party or respondent, but will certainly have a significant say in the matter before the SC. With the Chief Justice busy with a Constitutional Bench hearing, this matter will come up before a three division bench on September 4 or 5 now. Thereafter a short duration hearing will take place.
NTPC's claims on 12 million unitsper day for 17 years at $2.34 are critical to RNRL's position in this entire gas opera. RIL had won a global tender floated by NTPC in 2003 at $2.34. Since then Mukesh Ambani and RIL got greedy and changed his mind hiding behind the frockcoat of oil minister Murli Deora. As part of the RIL scheme of demerger, RIL was to supply gas at a similar price to RNRL for a similar period of 17 years. Only the quantity of gas was 28 million units per day. Surprising that it has taken NTPC six years to really take a stand in this matter, though a case is pending in the Bombay High Court against RIL.
Sharma was furious with the draft petition, saying that it did not safeguard NTPC's concerns on the issue of protecting future gas supplies from RIL. Times of India has reported that Sharma put his foot down on the sensitive issue. NTPC will not be party or respondent, but will certainly have a significant say in the matter before the SC. With the Chief Justice busy with a Constitutional Bench hearing, this matter will come up before a three division bench on September 4 or 5 now. Thereafter a short duration hearing will take place.
NTPC's claims on 12 million unitsper day for 17 years at $2.34 are critical to RNRL's position in this entire gas opera. RIL had won a global tender floated by NTPC in 2003 at $2.34. Since then Mukesh Ambani and RIL got greedy and changed his mind hiding behind the frockcoat of oil minister Murli Deora. As part of the RIL scheme of demerger, RIL was to supply gas at a similar price to RNRL for a similar period of 17 years. Only the quantity of gas was 28 million units per day. Surprising that it has taken NTPC six years to really take a stand in this matter, though a case is pending in the Bombay High Court against RIL.
Wednesday, August 26, 2009
litigation and more litigation
While RNRL, RIL, NTPC and the Government read oil ministry wear tight cumerbunds as they gird their loins to go into battle before the Supreme Court next week, as an aside a different kind of litigation proceedings have begun. Media which has benefited most because of the gas opera with juicy tidbits being leaked by both sections and of course a handsomne front page campaign by RNRL has now been slapped with defamatory notices for carrying those advertisements by Reliance Industries.
All 33 big, small and regional newspapers have reportedly received defamatory legal notices from India's biggest corporation. Even more interestingly one of the top editors who writes a Sunday column in a national daily has also been slapped with a similar notice for his fictional writing of facts by RNRL. Though media was having the last laugh till now enjoying both the news and revenues from the two sides, they are a trifle more circumspect now after RIL's missile. At the same time it has angered media bosses for they reckon a defamatory notice from RIL amounts to some sort of media censorship.
Expect more legal notices in the next few days and perhaps the odd advertisement also. The gas opera will now go into overdrive from next week, but expect nuggets, sorry skeletons to fall out of cupboards before that.
All 33 big, small and regional newspapers have reportedly received defamatory legal notices from India's biggest corporation. Even more interestingly one of the top editors who writes a Sunday column in a national daily has also been slapped with a similar notice for his fictional writing of facts by RNRL. Though media was having the last laugh till now enjoying both the news and revenues from the two sides, they are a trifle more circumspect now after RIL's missile. At the same time it has angered media bosses for they reckon a defamatory notice from RIL amounts to some sort of media censorship.
Expect more legal notices in the next few days and perhaps the odd advertisement also. The gas opera will now go into overdrive from next week, but expect nuggets, sorry skeletons to fall out of cupboards before that.
Tuesday, August 25, 2009
reality check for oil ministry
Instead of tuning up the volume, suddenly the oil ministry has chosen to tune it down considerably. Belligerence has been cast aside by the oil ministry in the face of the sustained campaign by RNRL to nail the truth. With lies, more lies and damned statistics being the operational plank for RIL supported by the oil ministry in the shameless campaign to obfuscate the real issues relating to the NTPC and RNRL gas supply deals, it has decided that objectivity is the only way forward in the SC. A clarifactory affidavit is being filed which will focus on the core issue of the production sharing contract between itself and RIL and the pricing of the gas.
All bellicose statements like 'MoU and family agreement between RIL and RNRL is null and void in the face of national interest involved in distribution of natural gas' have been expunged. All inflamatory statements like 'RIL and RNRL have appropriated, through the MoU, in a surreptitious and unauthorised manner, the entire gas treating the same as their personal and family property' have also been struck out. Even more interestingly, when it filed its appeal on July 18 in unseemly haste, it forgot to seek the SC's leave to file special leave petition. Ahem.
But even more shockingly, NTPC says RIL bid mum on government approvals, despite bidder having signed contract with centre much earlier in 2000. This has added a new dimension to the gas opera.It has written to the government saying, "From the information available with us, it is learnt that the PSC was signed by RIL with the government in 2000. While submitting its bid in 2003, they were fully aware of the provisions of the PSC. RIL in its bid never stated that the contract shall require the government's approval." NTPC CMD R S Sharma has written this to power secretary H SD Brahma queering the pitch for Mukesh and Murli completely just days before the apex court sits to hear the controversial matter.
All bellicose statements like 'MoU and family agreement between RIL and RNRL is null and void in the face of national interest involved in distribution of natural gas' have been expunged. All inflamatory statements like 'RIL and RNRL have appropriated, through the MoU, in a surreptitious and unauthorised manner, the entire gas treating the same as their personal and family property' have also been struck out. Even more interestingly, when it filed its appeal on July 18 in unseemly haste, it forgot to seek the SC's leave to file special leave petition. Ahem.
But even more shockingly, NTPC says RIL bid mum on government approvals, despite bidder having signed contract with centre much earlier in 2000. This has added a new dimension to the gas opera.It has written to the government saying, "From the information available with us, it is learnt that the PSC was signed by RIL with the government in 2000. While submitting its bid in 2003, they were fully aware of the provisions of the PSC. RIL in its bid never stated that the contract shall require the government's approval." NTPC CMD R S Sharma has written this to power secretary H SD Brahma queering the pitch for Mukesh and Murli completely just days before the apex court sits to hear the controversial matter.
NTPC SLP could be differentiator
In a dramatic decision, public sector power utility NTPC has decided to file a Special Leave Petition in the Supreme Court within the next few days. With power secretary H S Brahma confirming this development, NTPC despite the best efforts of the oil ministry to impede its progress in the matter is going ahead to secure its rights. Better sense has prevailed within the power as it goes out to protect its rights of procuring 12 million units of gas per day for a period of 17 years from RIL at the contracted price of $2.34 per million unit.
NTPC has been fighting a case in the Bombay High Court to get gas from RIL at the contracted price of $2.34, but RIL has reneged on this saying that NTPC doesn't have a concluded contract. This is an important landmark in the ongoing gas row because this will establish the floor price for gas at $2.34. The NTPC price became the basis of RIL-RNRL gas pricing for a similar period of 17 years. The oil ministry tried its level best to dissuade NTPC from doing the same, suggesting that the company wait for the outcome of its case against RIL pending in the Bombay High Court. Once the NTPC SLP is filed, it will become a unique quadrangular case with RNRL, oil ministry, NTPC and RIL in the apex court. RIL filed a SLP against RNRL verdict in Bombay High Court, oil ministry impleaded itself with another SLP and NTPC will now protect its interests with yet another SLP this time against RIL.
Fortunately the power ministry demanded that the oil ministry delete all statements that are injurious to NTPC's interest from its counter affidavit and SLP, filed in the SC cross appeals. The power ministry had identified 22 such paragraphs that were construed to be harmful to NTPC's interest. Finally victory for justice seekers and not those out to subvert the system.
NTPC has been fighting a case in the Bombay High Court to get gas from RIL at the contracted price of $2.34, but RIL has reneged on this saying that NTPC doesn't have a concluded contract. This is an important landmark in the ongoing gas row because this will establish the floor price for gas at $2.34. The NTPC price became the basis of RIL-RNRL gas pricing for a similar period of 17 years. The oil ministry tried its level best to dissuade NTPC from doing the same, suggesting that the company wait for the outcome of its case against RIL pending in the Bombay High Court. Once the NTPC SLP is filed, it will become a unique quadrangular case with RNRL, oil ministry, NTPC and RIL in the apex court. RIL filed a SLP against RNRL verdict in Bombay High Court, oil ministry impleaded itself with another SLP and NTPC will now protect its interests with yet another SLP this time against RIL.
Fortunately the power ministry demanded that the oil ministry delete all statements that are injurious to NTPC's interest from its counter affidavit and SLP, filed in the SC cross appeals. The power ministry had identified 22 such paragraphs that were construed to be harmful to NTPC's interest. Finally victory for justice seekers and not those out to subvert the system.
Saturday, August 22, 2009
the channel of babble
On Friday, the oil ministry hit back at the Anil Ambani advertising campaign choosing to describe it as 'unfortunate... propaganda.' It was obviously just as important as the advertising campaign which had been unleashed for over five days, but it was not the government closing ranks against the interloper, but only the section that was targeted - the oil ministry which was reacting to the damaging copy in the adverts. But the channel of babble - CNBC TV 18 - decided to up the ante on this oil ministry rebuttal. Calling it a government rebuttal, it went over the top using words which did not do justice to the channel's standing and credibility. It was high pitched with one particular reporter - Siddharth Zarabi - unleasing his tongue to create a fearsome spectre of the government where none existed.
It was vital to the oil ministry's Special Leave Petition in the Supreme Court to react to the campaign which has demolished its case and mobilised public opinion. The oil ministry perforce had to react in some form or the other as it has been shown in extremely poor light these last few days. Its tenuous case in the apex court would have been irretrievably eroded. But the channel of babble which has been very balanced in this dispute till now simply lost it in that space of half and hour. The reporter Zarabi just lost his head and turned the oil ministry release into some sort of draconian crackdown on ADAG talking nonsense and drivel without comprehending facts as they were being played out.
It was left to the more balanced Shereen Bhan to venture into the sandpit to soothe and calm the debate and add a balanced twist to it. Otherwise reporters like Zarabi who seem to have no understanding of important matters like the gas row would have been allowed to do a naked jig on live television. This distinction between what the oil ministry refuting ADAG charges against it and the government as a whole hitting back at ADAG needs to be made clear for it provides a perspective on how acutely the faultlines are drawn even inside the government on this issue.
The next morning's newspapers were clear in their understanding - they articulated that the oil ministry statement said, "the government will protect the interest of its generation utility NTPC by all means." Which means that ADAG and its 8 million shareholders had managed to convince the oil ministry of its duty to prtest and serve the interests of government owned PSU NTPC in the gas supply case. A very clear message which Mr Zarabi failed to read. Moreover, Zarabi and the channel of babble for that half and hour tried to convince viewers that the government read oil ministry was enforcing the $4.20 price for the supply of gas. Nowehere was that said in the statement, all it said was that the EGom had set a $4.20 price. What was conveniently forgotten was the Bombay High Court judgment of June 15 which fixes price and tenure for RNRL at $2.34 and 17 years.
CNBC TV 18 which is widely respected amongst the corporate and market watching community would do well to ensure that its reporters are literate enough to understand the nuances of a simple release from the oil ministry.
It was vital to the oil ministry's Special Leave Petition in the Supreme Court to react to the campaign which has demolished its case and mobilised public opinion. The oil ministry perforce had to react in some form or the other as it has been shown in extremely poor light these last few days. Its tenuous case in the apex court would have been irretrievably eroded. But the channel of babble which has been very balanced in this dispute till now simply lost it in that space of half and hour. The reporter Zarabi just lost his head and turned the oil ministry release into some sort of draconian crackdown on ADAG talking nonsense and drivel without comprehending facts as they were being played out.
It was left to the more balanced Shereen Bhan to venture into the sandpit to soothe and calm the debate and add a balanced twist to it. Otherwise reporters like Zarabi who seem to have no understanding of important matters like the gas row would have been allowed to do a naked jig on live television. This distinction between what the oil ministry refuting ADAG charges against it and the government as a whole hitting back at ADAG needs to be made clear for it provides a perspective on how acutely the faultlines are drawn even inside the government on this issue.
The next morning's newspapers were clear in their understanding - they articulated that the oil ministry statement said, "the government will protect the interest of its generation utility NTPC by all means." Which means that ADAG and its 8 million shareholders had managed to convince the oil ministry of its duty to prtest and serve the interests of government owned PSU NTPC in the gas supply case. A very clear message which Mr Zarabi failed to read. Moreover, Zarabi and the channel of babble for that half and hour tried to convince viewers that the government read oil ministry was enforcing the $4.20 price for the supply of gas. Nowehere was that said in the statement, all it said was that the EGom had set a $4.20 price. What was conveniently forgotten was the Bombay High Court judgment of June 15 which fixes price and tenure for RNRL at $2.34 and 17 years.
CNBC TV 18 which is widely respected amongst the corporate and market watching community would do well to ensure that its reporters are literate enough to understand the nuances of a simple release from the oil ministry.
Friday, August 21, 2009
I, me, mine a mindless pursuit
The Times of India in a front page story has said that the PM is keen that a middle ground is found by the two warring Ambani brothers in the ugly gas row. Is it possible that the two brothers can kiss and make up at this late stage of the no holds barred fight? Will the PM's words cap the flare up? A flare up which has seen an unprecedented vitriolic attack on the oil ministry and a high decibel advertising campaign in all small and large dailies in the country. The only positive after the government issued a statement is that the advertising did not appear on Saturday morning, but the breather could well be due to the onset of the weekend.
The PM's soothing words to the brothers may well see some sort of conciliation between the two camps, but the question is who will play interlocutor. Will matriach Kokilaben Ambani play mediator again? Will the battle be resolved within the confines of Seawind, the family residence? Interestingly, the non compete agreement between the two brothers ends in June 2010. Can the two brothers sit down and resolve all ending issues? The PM's take is that both are two big to fail and fall now. The two groups are the biggest in Indian business. Against this backdrop, Anil Ambani has written a very illuminating piece in Speaking Tree in the Times of India where he highlights the Trust factor, saying that it is everything and that it needs to be nurtured.
Suggesting that his father Dhirubhai built his business on the foundation of trust by naming his company Reliance, Anil believes that the message that was being sent out to one and all in public domain was that - you can rely on me. Increasingly since his death, Reliance is something that cannot be trusted is the allusion that Anil gives through his article. That Reliance Industries under his brother has turned into a 'I, me and mine' type of corporation and institution only highlights the erosion of Dhirubhai's value systems and a major trust deficit. Anil Ambani writes, "How easy it is to let the obsession with self - I, me, mine - vitiate even the purest, most selfless of relationships - the bond between a child and his mother.' Clearly hinting at the trust deficit again between Mukesh Ambani and the mother Kokilaben by not honouring the tenets of the family settlement initiated by the matriach.
Does the fine print of this piece by Anil Ambani in ToI's Speaking Tree make you believe that there can be any sort of rapprochement or mediation. Doesn't seem so. Mukesh Ambani only believes in might is right to get his own way. The last few lines of the article which reflect the inner pain go like this - "Can one break a word spoken solemnly in her presence (mother)? And if one does - in the mindless pursuit of power, ego or material riches - what has one gained, and more importantly, what has one lost?
The PM's soothing words to the brothers may well see some sort of conciliation between the two camps, but the question is who will play interlocutor. Will matriach Kokilaben Ambani play mediator again? Will the battle be resolved within the confines of Seawind, the family residence? Interestingly, the non compete agreement between the two brothers ends in June 2010. Can the two brothers sit down and resolve all ending issues? The PM's take is that both are two big to fail and fall now. The two groups are the biggest in Indian business. Against this backdrop, Anil Ambani has written a very illuminating piece in Speaking Tree in the Times of India where he highlights the Trust factor, saying that it is everything and that it needs to be nurtured.
Suggesting that his father Dhirubhai built his business on the foundation of trust by naming his company Reliance, Anil believes that the message that was being sent out to one and all in public domain was that - you can rely on me. Increasingly since his death, Reliance is something that cannot be trusted is the allusion that Anil gives through his article. That Reliance Industries under his brother has turned into a 'I, me and mine' type of corporation and institution only highlights the erosion of Dhirubhai's value systems and a major trust deficit. Anil Ambani writes, "How easy it is to let the obsession with self - I, me, mine - vitiate even the purest, most selfless of relationships - the bond between a child and his mother.' Clearly hinting at the trust deficit again between Mukesh Ambani and the mother Kokilaben by not honouring the tenets of the family settlement initiated by the matriach.
Does the fine print of this piece by Anil Ambani in ToI's Speaking Tree make you believe that there can be any sort of rapprochement or mediation. Doesn't seem so. Mukesh Ambani only believes in might is right to get his own way. The last few lines of the article which reflect the inner pain go like this - "Can one break a word spoken solemnly in her presence (mother)? And if one does - in the mindless pursuit of power, ego or material riches - what has one gained, and more importantly, what has one lost?
Thursday, August 20, 2009
oil conundrum
The malaise in India's oil and gas sector goes much deeper than just the recent gas opera featuring RNRL, RIL and NTPC where Mukesh Ambani aided and abetted by the oil ministry is trying to ensure that might is right in order to prevent execution of concluded contracts on gas supply. As much as 87 per cent of India's oil and gas acreage is with a duopoly - ONGC and RIL. One understands ONGC for there is a legacy system involved. ONGC being India's premier exploration company till RIL decided to enter this sector and tried to turn it in to a monopoly from what was till recently a duopoly.
What is not so well known is that India's famous New Exploration Licensing Policy has been an abject failure over the last three years. None of the global big five - Exxon, Shell, Chevron, Statoil and Conoco Phillips - have ever participated in these bids. Instead ONGC holds 57 per cent of all acreage, RIL holds 30 per cent and others consisting of more than 50 bit players have just 13 per cent of the NELP acreage.
Failure or success is for one and all to judge. The idea of converting India's upstream sector into a multiplayer competitive market has failed miserably. This despite tens and thousands of dollars being spent by the oil ministry and DGH to conduct road shows in key energy capitals across the world - Moscow, London, Houston etc. Sadly nobody is willing to bite. So claims by Cairn and RIL of mega discoveries in both oil and gas have not impressed the big boys. So, where is the question of the gas row affecting sentiment and global investment flows into India's energy sector. This is another one those myths perpetrated by the oil ministry/DGH to keep the rest of the government happy.
During the seventh round of NELP, no bids were received for 12 (over 20 per cent) out of 57 blocks; only a single bidder participated for 19 (over 30 per cent) out of 57 blocks and production sharing contracts are yet to be signed for 16 (over 25 per cent) blocks. This is a serious reality check for the government to examine the mismanagment of the oil and gas sector in the country.
A case of fictionalising fact Mr Deora and Mr Sibal. Even as you tom tom successes notched by the oil and gas sector in India. Nobody other than RIL wants to touch India with a bargepole. And you want to keep it that way.
What is not so well known is that India's famous New Exploration Licensing Policy has been an abject failure over the last three years. None of the global big five - Exxon, Shell, Chevron, Statoil and Conoco Phillips - have ever participated in these bids. Instead ONGC holds 57 per cent of all acreage, RIL holds 30 per cent and others consisting of more than 50 bit players have just 13 per cent of the NELP acreage.
Failure or success is for one and all to judge. The idea of converting India's upstream sector into a multiplayer competitive market has failed miserably. This despite tens and thousands of dollars being spent by the oil ministry and DGH to conduct road shows in key energy capitals across the world - Moscow, London, Houston etc. Sadly nobody is willing to bite. So claims by Cairn and RIL of mega discoveries in both oil and gas have not impressed the big boys. So, where is the question of the gas row affecting sentiment and global investment flows into India's energy sector. This is another one those myths perpetrated by the oil ministry/DGH to keep the rest of the government happy.
During the seventh round of NELP, no bids were received for 12 (over 20 per cent) out of 57 blocks; only a single bidder participated for 19 (over 30 per cent) out of 57 blocks and production sharing contracts are yet to be signed for 16 (over 25 per cent) blocks. This is a serious reality check for the government to examine the mismanagment of the oil and gas sector in the country.
A case of fictionalising fact Mr Deora and Mr Sibal. Even as you tom tom successes notched by the oil and gas sector in India. Nobody other than RIL wants to touch India with a bargepole. And you want to keep it that way.
RIL's mounting legal fees
The legal cost of RIL's battles are now turning into a sizeable number. Amounting to the size of a small company, even. Court battles are the norm at RIL these days - it is embroiled in a mega battle with RNRL in the Supreme Court, another is pending in the Bombay High Court with NTPC - and all this is taking its toll. While RNRL, the fuel linkage firm created by RIL to handle the gas supply to the Dadri plant in UP has seen its legal and professional fess jump from Rs 3.12 crore in 2006-07 to Rs 15.27 crore in 2007-08, it is RIL's numbers that are shocking.
Professional including legal fees had spiked from Rs 259.33 crore in 2005-06 to an astounding Rs 675.84 crore in 2007-08. Litigation doesn't come cheap and as Ram jethmalani remarked the other day on a TV channel, the only people who profit are lawyers. Which means that Harish Salve and company are making mega bucks thanks to the litigation against RNRL. No wonder Salve is seen sitting smugly in his new Bentley, driving around Delhi. Professional fees now amounts to 3.5 percent of its total net profit for 2007-08.
Spare a thought for shareholders who have been clamouring for a bonus for the last so many years.
Professional including legal fees had spiked from Rs 259.33 crore in 2005-06 to an astounding Rs 675.84 crore in 2007-08. Litigation doesn't come cheap and as Ram jethmalani remarked the other day on a TV channel, the only people who profit are lawyers. Which means that Harish Salve and company are making mega bucks thanks to the litigation against RNRL. No wonder Salve is seen sitting smugly in his new Bentley, driving around Delhi. Professional fees now amounts to 3.5 percent of its total net profit for 2007-08.
Spare a thought for shareholders who have been clamouring for a bonus for the last so many years.
Monday, August 17, 2009
road show
This is a road show with a difference. Anil Ambani has obviously done many road shows in his career to raise money for RIL and over the last few years for his own group companies, but his present road show is novel and thought provoking. By inserting adverts in all national dailies - small and big - two days running, he has evoked a strong public response to his fight for justice. By asking people to respond by giving an e mail id and sms number, he has done his homework extremely well. The public is responding to his charges, much like his senior counsel Ram Jethmalani's crusade against Rajiv Gandhi by asking 10 questions daily in the Indian Express 20 years ago.
It is a deliberately thought out ploy to involve not just his Group's 8 million shareholders, but also to provoke a wider public debate on RIL's shenanigans and its unholy nexus with RIL. The nexus is clearly to stymie NTPC and RNRL from getting gas from the KG Basin fields despite iron clad contracts having been signed.
On Tuesday, Anil Ambani through his advertisement asked - At the stroke of a pen, and in a matter of days, the petroleum ministry has approved a shockingly disproportionate 400 percent hike in the project cost of RIL's KG D6 gas fields from Rs 12,000 crore to Rs 45,000 crore. This could result in a loss of up to Rs 30,000 crore to the Government of India, as per its agreement with RIL. The retail power tariffs may also go up by 50 % or more than Re 1 per unit. Is this in public or national interest?
National or public interest, that is the clarion call given by RADAG. In its quest for justice, prepare yourself for many more such questions in the coming days. What is perhaps most interesting here is that Anil Ambani is not targeting the government, but consciously only a section of it - the petroleum ministry which has joined hands with elder brother Mukesh Ambani to pull off a grand heist amounting to Rs 30,000 crore. Meanwhile Anil Ambani's mother Kokilaben travels with him from one pilgrimage spot to another reposing her faith in the younger son in this battle against injustice.
It is a deliberately thought out ploy to involve not just his Group's 8 million shareholders, but also to provoke a wider public debate on RIL's shenanigans and its unholy nexus with RIL. The nexus is clearly to stymie NTPC and RNRL from getting gas from the KG Basin fields despite iron clad contracts having been signed.
On Tuesday, Anil Ambani through his advertisement asked - At the stroke of a pen, and in a matter of days, the petroleum ministry has approved a shockingly disproportionate 400 percent hike in the project cost of RIL's KG D6 gas fields from Rs 12,000 crore to Rs 45,000 crore. This could result in a loss of up to Rs 30,000 crore to the Government of India, as per its agreement with RIL. The retail power tariffs may also go up by 50 % or more than Re 1 per unit. Is this in public or national interest?
National or public interest, that is the clarion call given by RADAG. In its quest for justice, prepare yourself for many more such questions in the coming days. What is perhaps most interesting here is that Anil Ambani is not targeting the government, but consciously only a section of it - the petroleum ministry which has joined hands with elder brother Mukesh Ambani to pull off a grand heist amounting to Rs 30,000 crore. Meanwhile Anil Ambani's mother Kokilaben travels with him from one pilgrimage spot to another reposing her faith in the younger son in this battle against injustice.
public opinion
With RNRL releasing advertisements in all small and big newspapers on Monday morning, a new dimension has been added to the gas opera. Monday reportedly saw the first of many such advertisements as RADAG has decided to protect the interests of its 8 million strong shareholder family. The oil ministry is clearly in the line of fire.
The mobilising of public opinion in the process is significant because ADAG is obviously involving the people of India in this battle over gas, a national resource. It is the responses from common folk which are astounding. They are reportedly spewing invective at 'gaswale' uncle Murli Deora and elder brother Mukesh Ambani for appropriating a national resource. Meanwhile, poor NTPC and RNRL with concluded contracts in the bag wait for both RIL and MoPNG to honour their commitments.
By taking the battle to the streets, ADAG has decided that the time has come to ensure that justice delayed is not denied. It is now up to the apex court to give a just and equitable decision so that NTPC and RNRL can soldier on, despite the dilatory tactics of Mukesh Ambani and Murli Deora. With NTPC all set to jump into the SC with its own SLP after the SG and AG rapped it for being overly defensive and not seeking to enforce their contract with RIL. Expect more drama in the coming days.
The mobilising of public opinion in the process is significant because ADAG is obviously involving the people of India in this battle over gas, a national resource. It is the responses from common folk which are astounding. They are reportedly spewing invective at 'gaswale' uncle Murli Deora and elder brother Mukesh Ambani for appropriating a national resource. Meanwhile, poor NTPC and RNRL with concluded contracts in the bag wait for both RIL and MoPNG to honour their commitments.
By taking the battle to the streets, ADAG has decided that the time has come to ensure that justice delayed is not denied. It is now up to the apex court to give a just and equitable decision so that NTPC and RNRL can soldier on, despite the dilatory tactics of Mukesh Ambani and Murli Deora. With NTPC all set to jump into the SC with its own SLP after the SG and AG rapped it for being overly defensive and not seeking to enforce their contract with RIL. Expect more drama in the coming days.
Saturday, August 15, 2009
nyay aur anyay
Nyay aur anyay ki ladai mein, senior counsel Ram Jethmalani chose Anil Ambani over Mukesh Ambani. Why? Ram Jathmalani was on TV the other day and he gave a background to his association with Dhirubhai Ambani and the family. As he said, "I am sad that two sons of a dear friend of mine are squabbling. I am sad at the venom that they are displaying for one another. I knew both the brothers, just as I knew their father. At the condolence meeting, I had told the two brothers to embrace and stay together as one powerful combine. I am saddened that Mukesh Ambani disobeyed me and that is why I am appearing for Anil Ambani in this case."
Despite this Jethmalani, one of the most respected counsels in the country is still speaking the language of settlement. Why? Jethmalani believes that an unwritten rule of the Bar is to avoid litigation at all costs. Don't foment litigation, is what Jethmalani says. Only lawyers make money that way, he continues. Listen to your mother, argues the practical senior counsel. Jethmalani feels all this could have been avoided if the lawyers had paid heed to the Bar's unwritten code and Mukesh Ambani had allowed his mother to intervene and resolve the matter amicably.
Goes to show how even the law of the land was not required to settle this contentious issue. Only if the two brothers had resolved the matter and only if Mukesh Ambani was willing to honour his side of the commitments. First to NTPC and then to RNRL. But he chose to reneg because he didn't want to part with the gas that the unified Reliance Industries had discovered.
Despite this Jethmalani, one of the most respected counsels in the country is still speaking the language of settlement. Why? Jethmalani believes that an unwritten rule of the Bar is to avoid litigation at all costs. Don't foment litigation, is what Jethmalani says. Only lawyers make money that way, he continues. Listen to your mother, argues the practical senior counsel. Jethmalani feels all this could have been avoided if the lawyers had paid heed to the Bar's unwritten code and Mukesh Ambani had allowed his mother to intervene and resolve the matter amicably.
Goes to show how even the law of the land was not required to settle this contentious issue. Only if the two brothers had resolved the matter and only if Mukesh Ambani was willing to honour his side of the commitments. First to NTPC and then to RNRL. But he chose to reneg because he didn't want to part with the gas that the unified Reliance Industries had discovered.
busy, busy, busy
All lines on this route are busy. Try calling up the Attorney General Ghoolam Vahanvati these days and you will find that his line is busy. There is a veritable call deluge on his phone. From the BCCI satraps to PSU power major NTPC to the government, everyonbe seems to be calling him for help. His sage counsel is required for vexed issues as diverse from the privacy and public liberty of our cricketers to NTPC's rights in the contentious gas row with RIL.
And the AG is answering all calls. After the Solicitor General Gopal Subramaniam slammed RIL for not honouring its 'concluded contract' for the expansion programme for NTPC's Kawas and Gandhar plants, it is now the AG's turn to shakedown RIL for its inability to fulfil tender commitments. Both the government law officers are in no mood to listen to any 'bakwas.' They want justice delayed, but not denied to be the maxim.
The AG has now castigated NTPC arguing that it should appeal to the SC against RIL, "without any loss of time." He has roundly criticised RIL saying, "It is indeed strange that RIL should place this burden (of inability to fulfil tender commitments) on the Union of India as having taken away the foundational basis of a very carefully structured bid which must have been undertaken with the concurrence of the administrative ministry."
Mukesh Ambani has very smartly used the oil ministry and the DGH to fight his battles. He has kept his head low in the trenches till now, but with the noise getting louder and louder by the day, it will that much more difficult to hide behind the coat tails of these worthies anymore. It is now or never as we go into the final round of this long drawn out gas opera. Just 15 days short of the hearing in the SC, the government's law officers have indeed complicated things for Mukeshbahi and RIL. NTPC's contract is for 12 million units of gas per day for 17 years and RIL has reneged on it. NTPC's half hearted attempts at reclaiming this gas are pending in the Bombay High Court and this is what the SG and AG are not roundly angry about. NTPC under the aegis of the powerless power ministry should have pursued it more aggressively, they contend.
And the AG is answering all calls. After the Solicitor General Gopal Subramaniam slammed RIL for not honouring its 'concluded contract' for the expansion programme for NTPC's Kawas and Gandhar plants, it is now the AG's turn to shakedown RIL for its inability to fulfil tender commitments. Both the government law officers are in no mood to listen to any 'bakwas.' They want justice delayed, but not denied to be the maxim.
The AG has now castigated NTPC arguing that it should appeal to the SC against RIL, "without any loss of time." He has roundly criticised RIL saying, "It is indeed strange that RIL should place this burden (of inability to fulfil tender commitments) on the Union of India as having taken away the foundational basis of a very carefully structured bid which must have been undertaken with the concurrence of the administrative ministry."
Mukesh Ambani has very smartly used the oil ministry and the DGH to fight his battles. He has kept his head low in the trenches till now, but with the noise getting louder and louder by the day, it will that much more difficult to hide behind the coat tails of these worthies anymore. It is now or never as we go into the final round of this long drawn out gas opera. Just 15 days short of the hearing in the SC, the government's law officers have indeed complicated things for Mukeshbahi and RIL. NTPC's contract is for 12 million units of gas per day for 17 years and RIL has reneged on it. NTPC's half hearted attempts at reclaiming this gas are pending in the Bombay High Court and this is what the SG and AG are not roundly angry about. NTPC under the aegis of the powerless power ministry should have pursued it more aggressively, they contend.
Wednesday, August 12, 2009
ntpc may finally jump into the gas opera
PSU power major NTPC is likely to jump into the gas pool. The government's SG has advised NTPC to protect its rights by intervening in the pending RIL-RNRL dispute in the apex court. The SG believes that RIL should not be allowed to wriggle out of its written commitment and agreement between the parties to supply gas to Kawas and Gandhar plants of its share of gas at an identical rate of $2.34 per million unit.
This opinion has sent shockwaves in the RIL camp which was forced to file a caveat in the SC. NTPC floated a global tender for gas supply which was won by RIL at a competitive price of $2.34. This pricing became the basis of RIL's gas supply to the Dadri gas fired plant for which a fuel linkage company called RNRL was established. But on June 17, 2005, a day prior to the family MoU between the two Ambani brothers, RIL summarily pulled out of the gas supply agreement with NTPC citing unconcluded contract, triggering off a massive legal dispute between RIL and RNRL on one side and RIL and NTPC on the other. SG's views if accepted will see NTPC intervention in the pending cross appeals.
Strangely the power ministry under whose aegis NTPC comes has kept silent on this controversial issue. NTPC contract with RIL gives it 12 million units of gas per day at $2.34 for a period of 17 years. RNRL's subsequent contract gives its 28 million units at the same price for the same tenure. But RIL refuses to give it to either party and wants to appropriate it for itself. Letting the oil ministry and DGH to fight its battles and hiding behind the national resource plea.
Sadly it doesn't wash in a court of law.
This opinion has sent shockwaves in the RIL camp which was forced to file a caveat in the SC. NTPC floated a global tender for gas supply which was won by RIL at a competitive price of $2.34. This pricing became the basis of RIL's gas supply to the Dadri gas fired plant for which a fuel linkage company called RNRL was established. But on June 17, 2005, a day prior to the family MoU between the two Ambani brothers, RIL summarily pulled out of the gas supply agreement with NTPC citing unconcluded contract, triggering off a massive legal dispute between RIL and RNRL on one side and RIL and NTPC on the other. SG's views if accepted will see NTPC intervention in the pending cross appeals.
Strangely the power ministry under whose aegis NTPC comes has kept silent on this controversial issue. NTPC contract with RIL gives it 12 million units of gas per day at $2.34 for a period of 17 years. RNRL's subsequent contract gives its 28 million units at the same price for the same tenure. But RIL refuses to give it to either party and wants to appropriate it for itself. Letting the oil ministry and DGH to fight its battles and hiding behind the national resource plea.
Sadly it doesn't wash in a court of law.
confusion leads to carbohydrates
These days a slightly chastened oil minister Murli Deora is busy putting his foot in to his mouth. The other day, while introducing some foreign delegates to the Director General of Hydrocarbons V K Sibal, Deora said meet V K Sibal - our director general for carbohydrates. Look like the minister needs a dose of carbs very desperately to restore his memory loss. The gaswale uncle is being pilloried for his partisan role in the gas opera. Recently in a fit of pique when journos were addressing him as Murli Kaka, he shouted - don't call me that, all my nephews are hassling me these days. I guess it doen't pay to support one nephew against the other, best to be at arm's length distance from both.
Looks like the affable Murli has bitten more than he can chew this time round.
Looks like the affable Murli has bitten more than he can chew this time round.
curiouser and curiouser
The alleged CAG audit of RIL's gas fields in the KG Basin is getting curiouser and curiouser with the passing of each day. Directorate General of Hydrocarbons claimed on his website just last week that CAG had completed its audit of RIL's development plan. That turned out to be yet another lie in the long list of lies. This was denied outright by CAG officials who said that they were facing difficulty because they did not have access to RIL's books. Now Times of India has reported that CAG is having problems accessing other private operators' books as well. CAG has been unable to get access to BG and Cairn's books as well. With private operators not complying with the oil ministry, isn't it amazing that the DGH carries on regardless with his pack of lies.
The way the system works is that the contractor is allowed to recover all capex and opex from the fields and only then starts paying the government profit petroleum or profit gas. By inflating the capex development plan to Rs 45,000 crore, RIL is ensuring a massive loss to the government exchequer. The oil ministry has now woken up late in the day to ask operators to provide access to their accounts. A meeting has been convened on Auguyst 17 to discuss the same, according to ToI. Astounding is the DGH's blatant disinformation campaign in this regard. ToI also claims that the PSC gives the government every right to ask for any documentation or information pertaining to it, but yet the oil ministry and DGH are busy pulling the wool over everyone's eyes.
National resource is all very well, but the DGH is allowing its naked hijack in broad daylight, even as public interest falls by the wayside. RIL and its conniving partner DGH and oil ministry continue to get away scot free.
The way the system works is that the contractor is allowed to recover all capex and opex from the fields and only then starts paying the government profit petroleum or profit gas. By inflating the capex development plan to Rs 45,000 crore, RIL is ensuring a massive loss to the government exchequer. The oil ministry has now woken up late in the day to ask operators to provide access to their accounts. A meeting has been convened on Auguyst 17 to discuss the same, according to ToI. Astounding is the DGH's blatant disinformation campaign in this regard. ToI also claims that the PSC gives the government every right to ask for any documentation or information pertaining to it, but yet the oil ministry and DGH are busy pulling the wool over everyone's eyes.
National resource is all very well, but the DGH is allowing its naked hijack in broad daylight, even as public interest falls by the wayside. RIL and its conniving partner DGH and oil ministry continue to get away scot free.
Sunday, August 9, 2009
cat that got the cream
Government's consistent stand in parliament is that it doesn't have any role to play in fixing gas pricing, its role is limited to ensuring that it gets its shares of profit from oil and gas as part of the production sharing contract.
According to the Directorate General of Hydrocarbons, RIL's cost of producing gas is $1.28 per million unit. Oil ministry and RIL have connived to fix the gas at $4.20, while the NTPC and RNRL pricing was fixed at $2.34. This is the simple part. Now we come to the more complicated part. RIL has been regularly hiking its capex development plan with the DGH. Right now the figure is Rs 45,000 crore. There is a reason behind this.
Under the PSC, the contractor RIL first gets to recover all its capex field development and operating costs and only then begins to pay the government. That constitutes profit gas. By bloating the field development cost, RIL is ensuring that the government gets practically nothing, while its pockets the cream.
Ergo, if the capital expenditure plans go up, the government's profits fall. That is why RIL would not like CAG to audit its KG Basin capex plans because then the truth will be uncovered and the gigantic fraud perpetrated on the Indian people will come to light. Incidentally the four member 'management committee' which approved the capex plan consists of two RIL personnel and two oil ministry personnel. Cosy set up, no?
All this under the watchful gaze of the people of India. Making it a Rs 45,000 crore scam. The largest ever.
According to the Directorate General of Hydrocarbons, RIL's cost of producing gas is $1.28 per million unit. Oil ministry and RIL have connived to fix the gas at $4.20, while the NTPC and RNRL pricing was fixed at $2.34. This is the simple part. Now we come to the more complicated part. RIL has been regularly hiking its capex development plan with the DGH. Right now the figure is Rs 45,000 crore. There is a reason behind this.
Under the PSC, the contractor RIL first gets to recover all its capex field development and operating costs and only then begins to pay the government. That constitutes profit gas. By bloating the field development cost, RIL is ensuring that the government gets practically nothing, while its pockets the cream.
Ergo, if the capital expenditure plans go up, the government's profits fall. That is why RIL would not like CAG to audit its KG Basin capex plans because then the truth will be uncovered and the gigantic fraud perpetrated on the Indian people will come to light. Incidentally the four member 'management committee' which approved the capex plan consists of two RIL personnel and two oil ministry personnel. Cosy set up, no?
All this under the watchful gaze of the people of India. Making it a Rs 45,000 crore scam. The largest ever.
ab CAG ki bari
A harassed Comptroller and Auditor General has finally written to the oil ministry asking for access to RIL's books in order to audit the government's gas contract with Mukesh Ambani owned company. For as long as two years, the audit body has been unable to access RIL's books. Shocking, no?
CAG has been waiting to audit RIL's capital expenditure development plan of Rs 45,000 crore for the KG Basin gas fields. This in turn forms a key area of the government's production sharing contract with RIL. CAG wants to examine the field development programme to see how much the government's share of profit gas actually is and whether RIL has inflated the capex plan to obfuscate the issue further.
The oil ministry according to reports will facilitate the meeting between RIL and CAG shortly. Another sad chapter in the holding the nation to ransom story of RIL. Tells you of how RIL disregards autonomous government institutions in its brazen appropriation of national resources.
CAG has been waiting to audit RIL's capital expenditure development plan of Rs 45,000 crore for the KG Basin gas fields. This in turn forms a key area of the government's production sharing contract with RIL. CAG wants to examine the field development programme to see how much the government's share of profit gas actually is and whether RIL has inflated the capex plan to obfuscate the issue further.
The oil ministry according to reports will facilitate the meeting between RIL and CAG shortly. Another sad chapter in the holding the nation to ransom story of RIL. Tells you of how RIL disregards autonomous government institutions in its brazen appropriation of national resources.
murli deora's 'patriotism'
Swaminathan Aiyar says that the prevailing gas price in the US is $3.70, much lower than what the government and Mukesh Ambani mandated price of $4.20 is. Strange? Begs the question - who is profiteering? In June 2008, Swami writes in the Times of India that the price of gas in the US was $13. One also needs to add that $4.20 excludes the transportation cost and other levies. Remember that the gas has to be brought onshore first before pipelines take it wherever...
Another top editor writing on the same page in ToI has torn into Murli Deora, sorry gaswale uncle. Quoting from extracts of the infamous Polyester Prince written by Hamish McDonald, M J Akbar has traced the genesis of Deora's relationship with the Dhirubhai Ambani. But he adds, "The past cannot be held against Deora's present." In an age where the price spiral of essential commodities continues unabated, Akbar makes a telling point, "This must be the first government that is determined on raising the price of a national asset that is in the private possession of Mukesh Ambani, rather than bringing it down, or indeed keeping it at a level that a private company offered and accepted as as part of a contractual agreement."
On Friday rising prices, Sharad Pawar claimed were due to the ever increasing cost of energy. Curious. One central minister wants to raise the price of energy - in this case gas - while another says that the price of energy is responsible for the price spike. Government working at odds, no? And whose interests does this gas price rise serve? Obviously Murli Deora's master Mukesh Ambani's. He pockets the money, not the government. The finance and power ministers are keeping quiet. Finance doesn't want to have anything to do with this unsavoury controversy because he wants to remain neutral while Power (under whom NTPC comes) remains powerless in this dispute. Akbar tells it like it is - Patriotism has clearly become the last refuge of Murli Deora.
Even at today's prevalent gas price of $3.70 in the US, Mukesh Ambani and mind you not the government is making a large profit. Fifty cents is the margin even at today's price of gas. Makes one wonder how the government or was it the oil ministry fixed $4.20 as the price of gas. Conventional economic logic be damned. People must pay more for their own national asset because Mukesh Ambani has to profit.
Another top editor writing on the same page in ToI has torn into Murli Deora, sorry gaswale uncle. Quoting from extracts of the infamous Polyester Prince written by Hamish McDonald, M J Akbar has traced the genesis of Deora's relationship with the Dhirubhai Ambani. But he adds, "The past cannot be held against Deora's present." In an age where the price spiral of essential commodities continues unabated, Akbar makes a telling point, "This must be the first government that is determined on raising the price of a national asset that is in the private possession of Mukesh Ambani, rather than bringing it down, or indeed keeping it at a level that a private company offered and accepted as as part of a contractual agreement."
On Friday rising prices, Sharad Pawar claimed were due to the ever increasing cost of energy. Curious. One central minister wants to raise the price of energy - in this case gas - while another says that the price of energy is responsible for the price spike. Government working at odds, no? And whose interests does this gas price rise serve? Obviously Murli Deora's master Mukesh Ambani's. He pockets the money, not the government. The finance and power ministers are keeping quiet. Finance doesn't want to have anything to do with this unsavoury controversy because he wants to remain neutral while Power (under whom NTPC comes) remains powerless in this dispute. Akbar tells it like it is - Patriotism has clearly become the last refuge of Murli Deora.
Even at today's prevalent gas price of $3.70 in the US, Mukesh Ambani and mind you not the government is making a large profit. Fifty cents is the margin even at today's price of gas. Makes one wonder how the government or was it the oil ministry fixed $4.20 as the price of gas. Conventional economic logic be damned. People must pay more for their own national asset because Mukesh Ambani has to profit.
Friday, August 7, 2009
sadness vs pain
Reliance Industries chairman Mukesh Ambani is suddenly feeling sad over his younger brother's acerbic pinpoint pincer attacks. Finally the deafening silence has been met with pangs of sadness over the nature of personal attacks launched by Anil Ambani. Rather late in the day to develop bouts of emotion, wouldn't you think? While reacting, he has chosen not to deal with substantive issues raised by the ongoing gas opera. All this while Mukesh Ambani has chosen to hide behind oil minister Murli Deora and hydrocarbons boss VK Sibal. He has let them do the talking. The matter is sub judice, he argues. He is keeping quiet out of respect for the Supreme Court which is adjudicating on the matter. But that doesn't prevent Deora, Sibal and company from launching virulent tirades against NTPC and RNRL. Meanwhile at a function in Mumbai he collected the other half of his family in a show of strength, but failed to respond to the material charges levelled against him and his company.
Subir Raha who knows a thing or two about NELP and production sharing contracts having been chairman of ONGC for many years has lashed out at the oil ministry in a devastating critique in the Economic Times. Raha writes, "The present petroleum minister has held the job for three and a half years; he had the cramp on 'sovereign right on mineral resources' only after the Bombay H.C decided on the RIL-RNRL case. Evidently he is oblivious of the fact that the prime purpose of his ministership is to protect and exercise those rights! Going by media reports, the ministry's and the ministry's case is that to make any offer of sale, the 'contractor' is required under the production sharing contract (PSC) to obtain prior approval of quantity and price from the ministry of petroelum and natural gas. Did the ministry 'approve' RIL's bid before it was submitted to NTPC? The point of dispute in the RIL-NTPC case is whether the global tender was concluded in a contract? Going by the stand now taken by the petroleum minister, RIL's bid was illegal because by all accounts, prior 'approval' of the petroleum ministry was not taken. The illegal tender should have been rejected outright; on the other hand, NELP terms and conditions were publicised in full by GoI MoPNG, and NTPC should have made such prior 'approval' for domestic NELP gas a pre-qualification criterion. Either way, NTPC is at fault. Absurd."
Well said Major Raha. He then goes on to blow away Deora's contention by saying, "NELP and award of each PSC under NELP is approved by the Cabinet; individual ministers cannot make any change in a signed PSC. Even when a minister and a contractor agree on modifications, the Cabinet has to accord formal approval...There is deafening silence from one set of interested parties: the power minister, his ministry and his company?" Amazing isn't it that a former chairman of navratna PSU ONGC has had to take up cudgels on behalf of another navratna PSU - NTPC? Nobody cares about NTPC, a public listed company with the government and foreign and domestic investors as its shareholders. Even as the brothers slug it out, NTPC writhes in pain and the government and parliament is seemingly paralysed by gas. It is another matter that sugar, pulses and vegetable prices are running amok.
Subir Raha who knows a thing or two about NELP and production sharing contracts having been chairman of ONGC for many years has lashed out at the oil ministry in a devastating critique in the Economic Times. Raha writes, "The present petroleum minister has held the job for three and a half years; he had the cramp on 'sovereign right on mineral resources' only after the Bombay H.C decided on the RIL-RNRL case. Evidently he is oblivious of the fact that the prime purpose of his ministership is to protect and exercise those rights! Going by media reports, the ministry's and the ministry's case is that to make any offer of sale, the 'contractor' is required under the production sharing contract (PSC) to obtain prior approval of quantity and price from the ministry of petroelum and natural gas. Did the ministry 'approve' RIL's bid before it was submitted to NTPC? The point of dispute in the RIL-NTPC case is whether the global tender was concluded in a contract? Going by the stand now taken by the petroleum minister, RIL's bid was illegal because by all accounts, prior 'approval' of the petroleum ministry was not taken. The illegal tender should have been rejected outright; on the other hand, NELP terms and conditions were publicised in full by GoI MoPNG, and NTPC should have made such prior 'approval' for domestic NELP gas a pre-qualification criterion. Either way, NTPC is at fault. Absurd."
Well said Major Raha. He then goes on to blow away Deora's contention by saying, "NELP and award of each PSC under NELP is approved by the Cabinet; individual ministers cannot make any change in a signed PSC. Even when a minister and a contractor agree on modifications, the Cabinet has to accord formal approval...There is deafening silence from one set of interested parties: the power minister, his ministry and his company?" Amazing isn't it that a former chairman of navratna PSU ONGC has had to take up cudgels on behalf of another navratna PSU - NTPC? Nobody cares about NTPC, a public listed company with the government and foreign and domestic investors as its shareholders. Even as the brothers slug it out, NTPC writhes in pain and the government and parliament is seemingly paralysed by gas. It is another matter that sugar, pulses and vegetable prices are running amok.
Thursday, August 6, 2009
ek aur gaswala
The debut in parliament of another gaswala, this time not an uncle, but a Reliance Industries minion Parimal Nathwani is exteremly important in the context of the ongoing gas opera for it tells us how the sanctity of prliament is being misused and abused to further naked corporate interests. RIL's Gujarat strongman and Narender Modi groupie Nathwani an 'independent' MP in the upper house declared his affiliation for RIL openly.
By openly and aggressively saying that he represents the corporate interests of RIL, he has thrown up questions over the very existence of such individuals in the two houses. CPM MP Brinda Karat saddened with the way things are working out has even compalined to the Rajya Sabha chairperson vice president Hamid Ansari on this nexus and how it impacts the dignity of the house. She has spoken about the conflict of interest extending now to the conflict of dignity of the house. And rightly so. Nathwani's open advocacy makes one wonder where Indian democracy is headed?
By openly and aggressively saying that he represents the corporate interests of RIL, he has thrown up questions over the very existence of such individuals in the two houses. CPM MP Brinda Karat saddened with the way things are working out has even compalined to the Rajya Sabha chairperson vice president Hamid Ansari on this nexus and how it impacts the dignity of the house. She has spoken about the conflict of interest extending now to the conflict of dignity of the house. And rightly so. Nathwani's open advocacy makes one wonder where Indian democracy is headed?
ntpc left holding baby and bathwater
Gaswale uncle is going great guns in parliament and he cares two hoots for what the rest of the world thinks. Isn't it amazing a section of the government (oil ministry) is out to undermine and even jeopardise the interests of another (power ministry). In a brazen and blatant manner and the powers that be are not able to do a damn thing. Let us for a moment forget about the Ambani gas opera. Throw it into the nearest the waste paper basket. Let us concentrate on the interests of NTPC, a government owned navratna. Nobody seems to care about the poor PSU's interests in this gas opera. They are the first and rightful claimant of the gas as per an international tender that they put out which was secured by RIL at $2.34. The government seems to be powerless. Yes powerless for poor NTPC is part of the power ministry which has no voice whatsoever in the Union cabinet.
With gaswale uncle now officially refuting NTPC's right to 12 million units per day for 17 years on the floor of the house, it is curtains for NTPC. To use gaswale uncle's exact words - RIL's $2.34 gas price for NTPC is not valid, selling price will be $4.20. So, the RIL spokesperson in the government Murli Deora couldn't care less as he toes the RIL line in parliament. Saying that it is an unconcluded contract, Deora doesn't want to be reminded that RIL sent its letter cancelling the contract on June 17, 2005, a day prior to the Kokilaben Ambani family settlement announcement. That the price is $4.20 is not lost on anyone. 420 is a number that all Indians are familiar with. It is a synonym for duplicity and fraud.
Even more significantly, Deora ruled out nationalising of the KG Basin fields to virtually ensure that Mukesh Ambani's unfettered claims on the 'national resource' remain intact. All this even as MPs across party lines attacked him. But he didn't bat an eyelid. Does this performance in parliament dash the hopes of NTPC once and for all? Or will the Supreme Court prove to be the final arbiter, like it always does? Fundamentally, technically and legally many legal ceagles reckon that the Supreme Court cannot find fault with the Bombay High Court judgment in favour of RNRL. This will be bedrock on which the SC will give its final say. But that certainly leaves powerless NTPC holding the baby and the bathwater.
Deora said, "We have nothing to do with the private dispute of the two industrialists. However, we have everything to do with protecting the interests of the government and public. It is our constitutional and legal obligation to protect the people of India and we will, honestly honour it. We will make all endeavours to protect the government's legal rights to regulate the utilisation of gas and its allocation."
Excuse me, let us the people of India remind Mr Minister that NTPC is a government owned company which is publicly listed and has lakhs of shareholders - government, foreigners and Indian public and to any right minded person epitomises everything that Deora is defending so stoutly in parliament. Only for him 'protecting interests' of Reliance Industriues gains paramountcy over everything else. Meanwhile, NTPC and the power ministry appear helpless in the face of such brazen speak.
With gaswale uncle now officially refuting NTPC's right to 12 million units per day for 17 years on the floor of the house, it is curtains for NTPC. To use gaswale uncle's exact words - RIL's $2.34 gas price for NTPC is not valid, selling price will be $4.20. So, the RIL spokesperson in the government Murli Deora couldn't care less as he toes the RIL line in parliament. Saying that it is an unconcluded contract, Deora doesn't want to be reminded that RIL sent its letter cancelling the contract on June 17, 2005, a day prior to the Kokilaben Ambani family settlement announcement. That the price is $4.20 is not lost on anyone. 420 is a number that all Indians are familiar with. It is a synonym for duplicity and fraud.
Even more significantly, Deora ruled out nationalising of the KG Basin fields to virtually ensure that Mukesh Ambani's unfettered claims on the 'national resource' remain intact. All this even as MPs across party lines attacked him. But he didn't bat an eyelid. Does this performance in parliament dash the hopes of NTPC once and for all? Or will the Supreme Court prove to be the final arbiter, like it always does? Fundamentally, technically and legally many legal ceagles reckon that the Supreme Court cannot find fault with the Bombay High Court judgment in favour of RNRL. This will be bedrock on which the SC will give its final say. But that certainly leaves powerless NTPC holding the baby and the bathwater.
Deora said, "We have nothing to do with the private dispute of the two industrialists. However, we have everything to do with protecting the interests of the government and public. It is our constitutional and legal obligation to protect the people of India and we will, honestly honour it. We will make all endeavours to protect the government's legal rights to regulate the utilisation of gas and its allocation."
Excuse me, let us the people of India remind Mr Minister that NTPC is a government owned company which is publicly listed and has lakhs of shareholders - government, foreigners and Indian public and to any right minded person epitomises everything that Deora is defending so stoutly in parliament. Only for him 'protecting interests' of Reliance Industriues gains paramountcy over everything else. Meanwhile, NTPC and the power ministry appear helpless in the face of such brazen speak.
Wednesday, August 5, 2009
minister has to go
Business Standard in a scathing indictment in its editorial has asked for oil minister Murli Deora's head. It is much like Alice in Wonderland with a clarion call of 'Off with his head' going out loud and clear. When a respected newspaper like BS in its editorial asks for a change, then the widespread indignation that the oil minister's role in the gas row has created is a lesson in itself for the political class.
Titled - 'Move Mr Deora' - the editorial fulminates on the Murli Deora's partisan role in the matter. Saying that the oil minister has offered no clarity whatsoever in his defence in the floor of the house on Monday, BS says that it is well known that Deora is a close friend of Mukesh Ambani, the RIL chairman and as such his role is suspect because there is a conflict of interest. BS writes, "Changing Mr Deora's portfolio is a first step... The Government cannot afford to have its name dragged into a battle between two corporate giants." Saying that the blandness of Deora's responses have bene noteworthy with Deora repeating the old line that public interest being superior to the deal between the two brothers.
In any case, it appears that Deora's fabulous run in Shastri Bhawan might be over for he is becoming increasingly forgetful these days. Mail Today in its whispers column - Raisina Tattle - on Wednesday writes that Deora now forgets where his car is parked to which way his office is located in parliament. A man once known as Kaka to the two Ambani brothers has a new epithet in Delhi. He is now called gaswale Kaka. Reportedly he is the butt of jokes even amongst his colleagues who refer to him by his new moniker gaswale uncle. His barefaced support for Mukesh Ambani has left many in government deeply embarrassed. BS has argued for his departure very coherently and cogently.
Titled - 'Move Mr Deora' - the editorial fulminates on the Murli Deora's partisan role in the matter. Saying that the oil minister has offered no clarity whatsoever in his defence in the floor of the house on Monday, BS says that it is well known that Deora is a close friend of Mukesh Ambani, the RIL chairman and as such his role is suspect because there is a conflict of interest. BS writes, "Changing Mr Deora's portfolio is a first step... The Government cannot afford to have its name dragged into a battle between two corporate giants." Saying that the blandness of Deora's responses have bene noteworthy with Deora repeating the old line that public interest being superior to the deal between the two brothers.
In any case, it appears that Deora's fabulous run in Shastri Bhawan might be over for he is becoming increasingly forgetful these days. Mail Today in its whispers column - Raisina Tattle - on Wednesday writes that Deora now forgets where his car is parked to which way his office is located in parliament. A man once known as Kaka to the two Ambani brothers has a new epithet in Delhi. He is now called gaswale Kaka. Reportedly he is the butt of jokes even amongst his colleagues who refer to him by his new moniker gaswale uncle. His barefaced support for Mukesh Ambani has left many in government deeply embarrassed. BS has argued for his departure very coherently and cogently.
Tuesday, August 4, 2009
kissa gas ka
Ye na mera hai, na tera, yeh gas toh sarkar hai, so says oil minister Murli Deora. Samajwadi Party leader Mulayam Singh tears into him on the floor of the house, stopping short at calling him a thief. Soon after, Anil Ambani launches into Deora saying that the oil minister has adopted a partisan approach on the issue from day one to protect the interests of elder brother Mukesh Ambani. By evening, government counsel in the Supreme Court on the gas row Mohan Parasaran says that government has a case vis a vis sovereign ownership and will intervene suitably in the matter.
Excuse me, isn't this matter sub judice? Isn't this matter being heard in the SC? What is the matter with everybody? Look around you, propriety has been given a decent burial. Former home secretary Anil Baijal is the spokesperson for the private airline operators and he calls for a strike on behalf of them. So, he is opposing the government, isn't he? Former TRAI chairman and disinvestment secretary Pradeep Baijal is operating on behalf of Mukesh Ambani and Ratan Tata owned PR company, serving their corporate interests by walking the corridors of power and lobbying on their behalf.
Now oil minister is brazenly and blatantly talking the talk and walking the walk for Mukesh Ambani in parliament. What is happening to this country? What has happened to high moral ground, public propriety and other such monikers? I guess it is a sign of the times that sitting politicos and former bureaucrats have decided to cast the cloak of propriety aside and support their respective business interests. But does this reflect well on the government its Prime Minister who is known for his standards of ethicality and integrity? Sad to see public life degenerating into this kind of a joke. And all for 20 pieces of silver. Think of the apex court's position in the gas row. It is unable to enforce a code of conduct among the various players including the minister and the government counsel. What happened to sub judice? Earlier people would think twice before taking and view publicly on the matter.
Excuse me, isn't this matter sub judice? Isn't this matter being heard in the SC? What is the matter with everybody? Look around you, propriety has been given a decent burial. Former home secretary Anil Baijal is the spokesperson for the private airline operators and he calls for a strike on behalf of them. So, he is opposing the government, isn't he? Former TRAI chairman and disinvestment secretary Pradeep Baijal is operating on behalf of Mukesh Ambani and Ratan Tata owned PR company, serving their corporate interests by walking the corridors of power and lobbying on their behalf.
Now oil minister is brazenly and blatantly talking the talk and walking the walk for Mukesh Ambani in parliament. What is happening to this country? What has happened to high moral ground, public propriety and other such monikers? I guess it is a sign of the times that sitting politicos and former bureaucrats have decided to cast the cloak of propriety aside and support their respective business interests. But does this reflect well on the government its Prime Minister who is known for his standards of ethicality and integrity? Sad to see public life degenerating into this kind of a joke. And all for 20 pieces of silver. Think of the apex court's position in the gas row. It is unable to enforce a code of conduct among the various players including the minister and the government counsel. What happened to sub judice? Earlier people would think twice before taking and view publicly on the matter.
Sunday, August 2, 2009
offensive tactics
On the eve of the oil minister Murli Deora's defence of his indefensible ministry's position on the Ambani gas row, Anil Ambani unleashed yet another broadside on Sunday. Rising to the defence of the hapless PSU power major NTPC, Ambani Junior said, "NTPC is an innocent victim of Mukesh Ambani's RIL's corporate greed and if the gas is not sold at the 'agreed' price of $2.34, it would result in a loss of Rs 30,000 crore to the company."
In a letter to power minister Sushil Kumar Shinde released to the media on Sunday, Ambani clarified that RNRL was not at all keen to scupper NTPC's interests of garnering 12 million units of gas from RIL for a duration of 17 years. The unfortunate reality is that RIL pulled out of its global tender to provide gas to NTPC's Kawas and Gandhar plants on June 17, 2005, a day prior to the family settlement between the two Ambani brothers which divided the Reliance Industries empire through a transparent process of corporate restructring and a scheme of demerger.
RIL pulled out of its contract saying that it was 'unconcluded' knowing fully well what the contents of the family MoU were. Given that the RIL-NTPC gas deal for 12 million units for 17 years formed the pricing basis of the 28 million units for a similar 17 years to RNRL. By reneging on the NTPC deal priced and discovered through an internationally competitive bid, RIL was paving the path for playing truant with both RNRL and NTPC in the future. It was part of a larger more deliberate plan to retain control over the gas. Both NTPC and RNRL subsequently took RIL to court and RNRL received justice on June 15 this year. Since then RIL has filed a Special Leave Petition in the SC challenging the verdict. The SC will hear the case from September 1.
It is clear as daylight that pandemonium will prevail in parliament when Murli Deora tries to defend his ministry on Monday. Interestingly, no section of the gevernment other than the oil ministry has challenged the Bombay High Court June 15 verdict.
This makes for a very curious state of play. Will the government disown Murli Deora after his utterances on Monday? Will India have a new oil minister as soon as parliament is adjourned? Will a top politician close to the powers that be make a comeback to the Cabinet as the new oil minister? We are in for interesting times.
In a letter to power minister Sushil Kumar Shinde released to the media on Sunday, Ambani clarified that RNRL was not at all keen to scupper NTPC's interests of garnering 12 million units of gas from RIL for a duration of 17 years. The unfortunate reality is that RIL pulled out of its global tender to provide gas to NTPC's Kawas and Gandhar plants on June 17, 2005, a day prior to the family settlement between the two Ambani brothers which divided the Reliance Industries empire through a transparent process of corporate restructring and a scheme of demerger.
RIL pulled out of its contract saying that it was 'unconcluded' knowing fully well what the contents of the family MoU were. Given that the RIL-NTPC gas deal for 12 million units for 17 years formed the pricing basis of the 28 million units for a similar 17 years to RNRL. By reneging on the NTPC deal priced and discovered through an internationally competitive bid, RIL was paving the path for playing truant with both RNRL and NTPC in the future. It was part of a larger more deliberate plan to retain control over the gas. Both NTPC and RNRL subsequently took RIL to court and RNRL received justice on June 15 this year. Since then RIL has filed a Special Leave Petition in the SC challenging the verdict. The SC will hear the case from September 1.
It is clear as daylight that pandemonium will prevail in parliament when Murli Deora tries to defend his ministry on Monday. Interestingly, no section of the gevernment other than the oil ministry has challenged the Bombay High Court June 15 verdict.
This makes for a very curious state of play. Will the government disown Murli Deora after his utterances on Monday? Will India have a new oil minister as soon as parliament is adjourned? Will a top politician close to the powers that be make a comeback to the Cabinet as the new oil minister? We are in for interesting times.
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