RIL to give gas to ADAG power plant "despite default"

Accusing Anil Ambani group firm Reliance Infra of faulting the contractual notice period for maintenance shutdown at its power plant, Mukesh-led RIL has decided to give gas till today despite the payment default.

"Under the terms of the GSPA, a change in the schedule of planned maintenance needs a 60-day prior notice. As an exception, we agree to change in planned maintenance by one day (to September 28) even though such notice was not given to us in accordance with the provisions of the GSPA," RIL's Marketing Head R Suresh has informed Reliance Infrastructure.

The reprieve to Reliance Infra's power plant in Andhra Pradesh, which is closing down for 35 days from today for annual maintenance, comes within days of RIL issuing a notice to suspend the gas to it for "default" in payment.

"Whereas we have no obligation to continue to supply any gas to you in view of your continuing default... We will continue to supply gas to your plant in view of the imminent planned maintenance," Reliance Industries told R-Infra in a letter dated September 25.

RIL officials did not elaborate on as to when the notice for shutting the gas pipe would come in force in case Anil Ambani group firm did not agree to pay the marketing margin.

Terming the marketing margin on gas charged by RIL as "illegal", Reliance Infra had refused to pay the same prompting Mukesh Ambani group company to put it on notice for nonpayment of an estimated Rs 12 lakh for the first fortnight of September before invoking bank guarantee to realise the amount.

"Please note that by continuing the supply of gas to the extent aforesaid, we should not be deemed to have waived our notice of suspension dated September 22 or any of our right under the GSPA or our letters dated September 22 or accepted the obligation to resume supply of gas at all till the payment default on your part is continuing," Suresh wrote.

RIL earlier this month had written to R-Infra saying its notice for postponement of the planned 35-day maintenance shutdown of its 220-Mw Samalkot power plant was not in conformity with the Gas Sales and Purchase Agreement (GSPA).

R-Infra on September 24 informed RIL of postponing the planned maintenance shutdown from September 27 by one day.

RIL said its decision was without prejudice to any of its rights and contentions, its notice of suspension dated September 22 and its rights to "recover full price of gas and the marketing margin for the entire quantity of gas supplied".

R-Infra had in April signed GSPA to buy 0.19 mmscmd of KG-D6 gas at government approved rates. The allocation was raised to 0.56 mmscmd on a 'fall-back' or temporary basis as not all of the initial customers identified for RIL gas were taking their allocated volumes.

The Anil Ambani Group paid marketing margin for the initial 4-5 months of supplies but stopped payments this month.