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.

1 comment:

George said...

It would be clear to anyone who has been following the ongoing Reliance gas dispute that the government is now soft-pedalling the issue. Murli Deora in his statement in Parliament gave ample indication of a comedown from the government’s initial stand. Significantly, the government has admitted to the importance of gas from the KG basin to run the Dadri power plant. He is now saying that Dadri’s requirements would be considered at par with those of other similar projects.

Deora’s shifting positions clearly show that government is still confused on what line of approach it should take on this issue.