CAG did not suggest witholding approvals for capex, he says
Reliance Industries has agreed to an audit of its KG D6 block for three years ending March 2012 without prejudice to its rights under the production sharing contract, petroleum minister Veerappa Moily said today.
Speaking in the Rajya Sabha, Moily said CAG has not asked his ministry to withhold approvals to RIL. “CAG has recommended that pending complete submission of all supporting records by the operators of PMT and KG-D6 relating to expenditure up to 2011-12, the ministry may examine all relevant issues closely and carefully before considering the desirability of any further approvals of capital expenditure”, he said. CAG wants the ministry to comprehensive and detailed scrutiny of records to verify that government’s financial interests have not been affected.
Moily said the government has directed the contractor to provide access to all records, accounts, documents of the block to CAG as per Production Sharing Contract (PSC) and the legal framework.
In November 2007, CAG was requested to conduct for special audit of Production Sharing Contracts for eight blocks from where revenue is generated. CAG had initiated audit of 4 blocks for financial year 2006-07 and 2007-08 and submitted its report in August 2011, which is under examination by Public Account Committee.
In May 2012, it was decided that CAG would undertake audit for the year 2008-09 to 2011-12. A petroleum ministry statement had earlier said that RIL had raised certain apprehensions regarding this audit and expressed their desire to discuss the issue further.
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