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.

4 comments:

Shudeep said...

That the SG's take on the matter comes as a surprise to RIL & co just goes to show just show their adventurous attempt to rob us of our right to gas - who do we have to thank for that? deora and his cronies.

RIL should not and does not have the right to sell the gas at any other price save that set by the govt forthe gd of the people. http://tinyurl.com/oegqdx

This nonsense should be concluded - before the entire India Inc becomes a laughing stock.

Shivangi said...

hopefully the Oil Min will now wake up...the Union Solicitor General Gopal Subramanium has advised NTPC Ltd to transfer its case against RIL to the Supreme Court.

In the words of the SG - “I regret to say that if international competitive bidding processes are intended to be treated with such disdain by a responsible bidder (in this case RIL), the world of business founded on trust and faith will break down,” ....

Nikhil said...

Someone needs to explain why NTPC has been treated so shabbily? Besides Anil Ambani, NTPC is the biggest sufferer from RIL reneging on its gas supply agreements. Is RIL more important to the government than even NTPC?

prah said...

the revelation by the Solicitor General is yet another warning to the government to clean up the gas mess without further delay.it is strange that the government goes all out to help RIL wriggle out of contracts it no longer wishes to abide by, but not stand by its own company which may lose up to Rs 20,000 crore due to gas supplied at double the contracted price?