Got mechanisms to correct irregularity: PM on CAG report on gas

Amid the raging controversy that the Oil Ministry and its technical arm DGH favoured Reliance Industries (RIL), as pointed out by CAG, Prime Minister Manmohan Singh today said there were mechanisms to correct irregularities, if any.

Interacting with a group of editors here, Singh, however, said it is "too premature" to say anything as the CAG report is only a draft and he has not got the full report yet.

"This is a draft report. If there is any irregularity, there are mechanisms to correct it," the Prime Minister said.

The Comptroller and Auditor General (CAG) in its draft audit report of KG-D6 block had said the ministry and the Directorate General of Hydrocarbons (DGH) allowed Reliance to raise the cost of developing the nation's largest gas fields by 117%.

It said rules were also bent to grant "huge benefits" to Reliance when the ministry allowed the company to retain the entire block, but said gains could not be quantified.

"The increase in cost from [$2.39 billion proposed in the] Initial Development Plan [of May 2004] to [$5.196 billion] in the addendum to the Initial Development Plan is likely to have a significant impact on the government of India's financial take," it said.

However, at this stage, based on the information provided, CAG is unable to comment on the reasonableness, or otherwise, of the increase in cost, both overall and in respect of individual line items, the CAG has said in a draft report sent to the oil ministry for comments.

Asked about the CAG's report, Singh said: "I have not got the full report. This is a special audit and was asked by the [oil] ministry itself."