Letters: Contractual flaws

Reliance Director PMS Prasad’s interview (‘Our gas price is fair, our costs are competitive’, September 7) is shocking in what it reveals about how the government functions. Though the government’s interpretation of the Production Sharing Contract (PSC) has favoured RIL in the battle against RNRL, Prasad admits the government is interpreting the PSC ‘as it goes along’. He says RIL did not know the PSC constrained its marketing freedom or that the government had the right to decide how much gas it could sell to each customer in each segment. So much so that the company even signed the family MoU thinking that the government approval was a mere formality. If this is the understanding of India’s biggest company which has the best legal advisors in the country, it is apparent other investors would also have thought they had complete marketing freedom. So it would come as a rude shock to find that the government had no intention of allowing the contractors any marketing freedom and just used that as a ruse to lure them.

Ambika Gupta, New Delhi

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