People's Democracy

KG BASIN GAS

CPI(M) Objects to Govt Affidavit in SC

THE CPI(M) has taken strong objection to the affidavit filed by the government in Supreme Court on behalf of Union of India recently which reportedly states: �Notwithstanding the above, the price offered by the contractor (Reliance Industries Ltd) to NTPC will require scrutiny and approval of the government under the Production Sharing Contract (PSC). The central government will take an appropriate decision in the case of NTPC as and when a need arises.�

Terming this stance of the government as �preposterous�, Tapan Sen, CPI(M) MP and secretary of CITU has sought the intervention of the prime minister Dr Manmohan Singh to get this affidavit withdrawn and NTPC's interests regarding the KGD6 gas pricing are protected.

Below we give excerpts of the letter written by the CPI(M) MP to the prime minister on December 11, 2009.

Further to my letter dated October 14, 2009 to you regarding KGD6 gas pricing in the background of the quoted gas price of 2.34 dollar/ mmbtu quoted by M/s RIL to NTPC, a Navaratna PSU, I am constrained to invite your attention to the affidavit filed in Supreme Court on behalf of Union of India on December 1, 2009.

The submission made by the government (quoted above) is preposterous in view of the following:

1.     The price offered by contractor i.e. M/s RIL to NTPC was through international competitive bidding in June 2004. Because of RIL�s refusal to supply gas, NTPC had filed a law suit in Bombay High Court in December 2005 and presumably the government �  as owner of the NTPC and having two joint secretaries of union power ministry as nominees in NTPC Board � is a part of the decision to go to the court.

Did the government nominees in NTPC Board agree with the decision to go to the High Court without proper scrutiny of the price quoted by RIL?

2.     After a reference from PMO, KGD6 gas pricing issue was reviewed in meetings of Committee of Secretaries (COS) held on June 29, 2007, July 02, 2007, July 06, 2007 and July 10, 2007. Detailed representation was made by NTPC before the COS.

Was the presentation of NTPC not scrutinised by COS headed by cabinet secretary?

3.     CMD, NTPC in his letter no. 01/CMD/PES/633 dated August 24,  2007 to chairman, EGoM had reportedly stated the following:

�In continuation of the presentation I made on the gas pricing issue of Reliance Industries Limited for KG Basin with particular reference to NTPC contract, I would like to convey that implication of the price differential between gas price as delivered at Kawas/Gandhar as per NTPC contract and RIL�s proposed price, will be of the order of Rs 24,000 crore for the quantity contracted by NTPC during the entire contract period of 17 years. This aspect may also please be kept in view. I would once again request that NTPC�s rights under the contract with RIL are not jeopardised in any manner while the government takes a view on the price proposed by RIL.�

Does it require any further scrutiny or approval beyond EGoM after 2 years for a price quoted through international bidding five years back?

In view of the above, I am afraid, the government affidavit before the Supreme Court is likely to jeopardise if not sabotage, the case of NTPC though a lower gas price from KG basin to NTPC means cheaper power to the people of this country. I therefore again urge upon you to intervene in the national interest so that the aforesaid affidavit is withdrawn and NTPC�s presentation to COS is submitted to Supreme Court on behalf of the government.