The Comptroller and Auditor General (CAG) audit of KG-DWN-98/3, popularly known as KG D6, has once again hit a roadblock.
The Mukesh Ambani-owned Reliance Industries Limited (RIL) has refused to accept the “exceptional circumstances” argument advanced by the Petroleum and Natural Gas Ministry for the performance audit and sought an assurance that it would be kept completely “confidential” and not tabled in Parliament.
It has also sought an assurance that the audit would not adversely affect the economic interests of the contractor (RIL).
RIL’s conditions have once again been rejected by the CAG, which has asserted that no audit would be possible on these terms, and that it has an unfettered right to carry it out. The CAG has already asked the Ministry to withhold all approvals to RIL except in emergency situations.
The CAG, in its communication to the Ministry, has said every attempt to thwart the audit was being made and one after another obstacle was being put up. RIL was shying away from providing information and has adopted an ‘indifferent’ attitude, resulting in the audit “coming to a standstill.”
The CAG had last month strongly objected to the “restrictive conditions” laid down by RIL as these “impinge[d] upon the basic mandate, rights and obligations of the CAG” to conduct an audit and report the results to Parliament.
In a letter to Petroleum Secretary G.C. Chaturvedi on October 26, two days before Jaipal Reddy was shunted out, the CAG said the conditions were unacceptable, and the CAG’s (Duties, Powers and Conditions of Service) Act, 1971, would override everything sought to be imposed on the audit process.
In the same letter, the government auditor listed RIL’s terms: audit be restricted to “accounting books and records;” review of the years that were time-barred be subject to the consent of the operator; report be submitted to the Ministry and not Parliament; confidentiality arrangements between parties to the production-sharing contract be ensured; and the CAG be bound not to use the information acquired for any other audit under the Act.
In a letter dated November 16, RIL president and COO (Business), B. Ganguly, requested that the report of the audit conducted under Section 1.9 of Product Sharing Contract (PSC) shall be submitted only to the Ministry.
“The procedure regarding the exceptions and adjustments shall be followed as laid down in the PSC, and in case of any disagreement, it shall be resolved by the mechanism provided in the PSC. RIL also emphasised that the report shall be kept ‘confidential’ as required by the PSC,” the letter stated.
Further, Mr. Ganguly said the CAG may conduct an audit/special performance audit of the Petroleum Ministry and Directorate General of Hydrocarbons (DGH) after the audit process under the PSC is completed.
“RIL has assured that it would extend cooperation by providing the Ministry/DGH with documents required to be maintained under PSC to facilitate such performance audit by the CAG of the Petroleum Ministry/DGH,” it stated.
However, as agreed, the letter stated that such a performance audit of Petroleum Ministry/DGH should not be mixed up with that of the RIL’s accounting books and records under Section 1.9, which will be independent and stand-alone.