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.
Saturday, August 15, 2009
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.
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