PAC questions ai move, ril's KG-D6 pact

The government is heading for another trough, with the public accounts committee (PAC) deciding to send time-bound questionnaires to probe the alleged irregularities in the purchase of 68 aircraft by Air India and the implementation of the production-sharing contract (PSC) between Reliance Industries Ltd (RIL) and the government.

The committee, chaired by Bharatiya Janata Party leader Murli Manohar Joshi, would seek replies to the questionnaire in 15 days, after which, it would summon the officials concerned.

Senior PAC members said the committee adopted three Comptroller and Auditor General (CAG) reports on Friday, including that on a performance audit of the railways. “We will send questionnaires to the ministries, and they will have to reply within 15 days of receiving the questionnaires. We will then start calling the witnesses to take part in the PAC meeting. Though ministers cannot be called in the normal course, all other senior officials of both the ministries would be called by the parliamentary committee,” said a senior PAC member.

The PAC is yet to deliberate on the CAG report on the Commonwealth Games. The three reports were tabled on the last day of the monsoon session.

In its report on functioning of the PSC with RIL, Cairn India and a consortium operating Panna Mukta and Tapti, CAG accused RIL of hoarding the exploration acreage. It recommended the petroleum ministry review the determination of the entire contract area of the KG block, while strictly complying with the PSC. RIL says, as a contractor, it remained “committed to complying with the PSC provisions and procedures, including adopting good international petroleum industry practices”.

In the case of the RJ-ON-90/1 block operated by Cairn, CAG found instances of irregular extension of exploration phases. On the Panna-

Mukta-Tapti fields, operated jointly by RIL, BG and ONGC, CAG said the government incurred a substantial loss (on account of royalty) by failing to finalise the norms for post-well head costs of gas, and the gas wellhead prices. The norms for post well-head costs, notified in August 2007, also had significant deficiencies.

The CAG report on Air India questioned its aircraft purchases. The government-owned company, which was not merged with Indian Airlines then, decided to buy 28 aircraft. After a review ordered by the civil aviation ministry, the number was increased to 68. The report also questioned Air India's “flawed Rs assumption that buying 50 long-range aircraft to increase capacity would automatically increase its market share. The auditor questioned the haste in which decisions were taken in acquiring new aircraft. It said the aircraft acquisition programme, under consideration since 1996, suddenly picked up steam and a contract for new aircraft was signed in seven months.