A friend of Mukesh Ambani should not be petroleum minister
Business Standard / New Delhi Aug 05, 2009, 00:37 IST
Given the government’s affidavit in the Supreme Court and the manner in which the finance and law ministers have rallied around him, it is not surprising that Petroleum Minister Murli Deora has said nothing new in his reply to Anil Ambani’s public charge that he was helping Mukesh Ambani’s Reliance Industries Limited (RIL) to renege on its gas deal with Anil Ambani’s Reliance Natural Resources Limited (RNRL). Even so, the blandness of the response has been noteworthy. Mr Deora reiterated the old line about public interest being superior to the deal between the two Ambani brothers, but did not even mention that the appeals bench of the Bombay High Court had rejected this very argument made by his ministry. Nor did he respond to the Anil Ambani charge that his ministry’s view till not long ago had been what the Bombay High Court has ruled — namely, that the government’s role in the Krishna-Godavari Basin gas was restricted to getting its share of the profits, nothing else. As a responsible minister, he should have responded to the charge that RIL’s capital costs were too high and resulted in the government’s share of the profits being kept to a minimum — even to a lay person, the fact that the four-member committee which approves the costs has two members from RIL appears problematic. Nor did he explain how RNRL’s Dadri power plant can come up unless there is a bankable gas supply agreement between RIL and RNRL first. But neither Mr Deora, nor those writing his speech, thought these issues were material.
The final decision on whether RNRL will get the gas for which it signed a contract with RIL, is something that the Supreme Court will decide. The case has larger implications, as to whether the government has the right to come up with a policy after an event and then apply it retrospectively. The gas allocation policy that Mr Deora referred to in Parliament, which lays down the priority of allocation of gas, came into being seven years after RIL first signed its Production Sharing Contract (PSC) with the government. Since the Bombay High Court has ruled the RIL-RNRL agreement conformed to RIL’s rights under the PSC, it is the gas allocation policy which is the cornerstone of the government’s new appeal.
While the Supreme Court takes its decision, the government needs to take some corrective action. Changing Mr Deora’s portfolio is the obvious first step. It is an open secret that Mr Deora is a close personal friend of Mukesh Ambani, so there is an obvious issue of conflict of interest. While the RIL-RNRL deal was a copy of the RIL-NTPC deal, the petroleum ministry’s counsel in the Bombay High court said the RIL-NTPC deal was not a final one — this caused a furore since NTPC is in court, asking RIL to supply gas under its deal with the latter. While this statement was withdrawn after the power ministry protested, it showed the petroleum ministry’s bias. The government cannot afford to have its name dragged into a battle between two corporate giants.
the writer is correct that the petroleum minister needs to be moved. Only, he should not be given any other ministry but may be sent back to mumbai to hold his old position.
he is one of the ministers who thinks nothing of the PM but rather relies on being in direct contact with the party president. he is known to have written a letter directly to her last year in connection with reduction in petro prices. even the PM office did not get a copy of the letter. even his ministry did not have a copy.
the country can ill afford to have such wayward ministers.
I am ashamed, so are Indian Engineers
You are making Indian engineers ashamed. I am shocked to hear all the allegations on the gold plating going on RIL's KG Basin. Get out of you room and listen to international experts'. They will tell you that RIL a first timer in the upstream sector has executed the KG Basin project in record time and cost. Similar projects in other parts of the world of similar size, scale and difficulty has been executed at almost double the cost of this project. Go check with ONGC or GSPC who have operation in KG blocks and ask them about their cost and time line of execution and you will have the answer.
Brothers will fight and do allegations and counter allegation but please do not undermine efforts of thousands engineer who created a marvel in the mid-sea. Pls attack minister or DGH or anyone you like but spare those who work on ground and create such projects.
Thanks
GS
What are you writing in your editorial "Move Mr. Deora" ? A friend of Mukesh Ambani should not be Petroleum Minister. I do not know what is wrong with you. Earlier Mr. Anil Ambani was complaining that Mr. Deora was his uncle. Any how if you say that a friend ofMr.Mukesh Ambani should not be Petroleum Minister then perhaps our Finance Minister Mr. Pranab Mukherjee should also not be Minister because he is also friend or uncle of both the brothers. Further Mr. PChidambaram is also friend ofMr. Mukesh Ambani then he should also not be Home Minister. These are small points which you have mentioned. The real issue is how to check the inflated cost of capital expenditure ofRs. 45,000 crore of RIL and also how the price has been refixed by Govt at 4.23 dollar per unit for NTPC or other gas consumers?
If Gas is so important, then govt. can nationalize it. Respected Finance minister haled Indira Gandhi's decision to nationalize banks.
Sorry, II forgot the Petroleum minister is a friend of oil company.
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