In a blow to Mukesh Ambani and Manmohan Singh — whose government stands accused of providing “huge” and “undue benefit” to Reliance Industries Ltd. — the Comptroller and Auditor General has indicted the Petroleum and Natural Gas Ministry for allowing “irregularities and bending rules” to “oblige” RIL in the Krishna Godavari basin gas fields, leading to a massive and as yet “unquantifiable” loss to the national exchequer.
Though his name does not figure directly in the CAG report, Murli Deora was the minister during whose tenure these irregularities occurred. Mr. Deora ran the PNG ministry from January 2006 till January 2011, when he was moved to Corporate Affairs.
In its 193-page Draft Report on production sharing contracts (PSCs) in the oil and gas field — a copy of which is with The Hindu — the CAG exposes the “close nexus” between RIL and the “bureaucrats” working in the Petroleum Ministry as well as its Directorate General of Hydrocarbons (DGH). This allowed Reliance to retain its entire offshore acreage, rather than surrendering those areas where it had not found oil or gas so that the government could invite fresh bids from other companies. Also, RIL was uncritically allowed to hike the capital expenditure for developing Dhirubhai-1 and 3, the largest of 18 gas finds in the KG-DWN-98/3, popularly known as the KG-D6 block, by a whopping 117 per cent though this meant a revenue loss for the exchequer.
This unvalidated cost inflation allows RIL to get away with paying less royalty to the government, the CAG notes, pointing to a basic flaw in the nature of PSCs which offers private explorers little incentive to keep capital expenditure down.
“The increase in cost from $2.39 billion in the Initial Development Plan 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. However, at this stage, based on the information provided, we are unable to comment on the reasonableness, or otherwise, of the increase in cost, both overall and in respect of individual line items,'' the CAG stated in its report that has been sent to the Petroleum Ministry for comments.
In an annexure, the CAG questions various items of expenditure including one for a vessel MOB-DEMOB where costs were increased more than four times from $91 million to $366 million but where the details of that spend were not provided to it by RIL. Other expenses added up to less but suggested a quest for featherbedding – such as buying expensive diesel for offshore operations from an RIL family company rather than from a cheaper PSU supplier.
RIL's “initial” capital expenditure plan was for $2.4 billion, which was increased to $5.2 billion for Phase-I with another $3.3 billion for Phase-II. The total amount comes to approximately Rs. 45,000 crore. Total gas output today, however, is much less than what the company had indicated on the basis of its capex.
Reacting to the CAG draft report, a RIL spokesman said: “Reliance Industries has not received a copy of the aforesaid report and hence is unable to comment on specific issues. The company strongly affirms that as a responsible Operator, it has fully complied with the requirements in the PSC at all times in conducting petroleum operations, and refutes any suggestion to the contrary.”
INDIA is bleeding . High net-worth individuals and private companies are found to be the primary drivers of illicit flows out of India's private sector as per the GFI report recently. The same money that is illegally taken out of the system is used to hoard , drive up share markets and prices of essential commodities (including vegetables ); build real estate empires and operate mafiadoms that adds more to their kitty .Hence the word 'mafia' is increasingly used in the media these days. We have the sand mafia, the land mafia, the fuel mafia, the food adulteration mafia, the builder mafia, the hawala mafia, the port mafia, and even the vegetable mafia.
To protect their interests and keep this illicit mill running, the triad- involving the corrupt business class, the political class and the executive today will do everything possible to stop the common man from getting to the truth or doing anything about it. RTI activists being killed, a sub-collector being burnt alive, pushing the PCI report on paid news under the carpet ; investigative journalists being murdered, Govt brutally beating-up peaceful demonstrators against corruption are all testimony to a sinister plot to hide the truth. Meanwhile a frenzy of greed and ambition has been unleashed among the upper and middle-class, never before seen in Indian history and defying all values and ethics that Indian society was known for . Today it has reached a point wherein the Indian state or the corrupt people that the 'system' permits to run India and every institution in India today, are actually destroying the 'Indian psyche' and moulding a society against its will into a divisive , greedy ,unethical, hobbesian society where man-eats-man and 'sab kuch chaltha hai'. Every govt official, corporate owner or journalist who is part of this triad nexus and who is exposed - every one of them shamelessly covers up and denies any wrongdoing, with the confidence that they would be eventually bailed out since those in glass houses cannot afford to throw stones. Not one of them gets convicted thus nor jailed nor is their illicit wealth confiscated . The empire moves on and the nation becomes poorer each day. If Egypt can do it, cannot Indians do it ? To throw everyone of these corrupt cancerous creatures out, who run the Indian 'state' today in the peoples' name. We are not a poor country. We have been made to believe that we are poor . The country's assets worth billions of dollars are being given away cheaply or being siphoned away by our politicians and corporates. 2G, CWG , S-band , KG basin oil - all these scams run into hundreds of thousands of crores , while same time the Planning Commission recently redefined 'below poverty line' for Indians to below Sub- Saharan Africa and 1/3rd levels stipulated by World Bank !! India is losing nearly Rs.240 crores every 24 hours, on average, in illegal financial flows out of the country (GFI report). The nation is bleeding .Time is running out very fast. Citizens must not become passive or impotent lest we perpetrate many a sad crime against our own national responsibilities and social duties. Every concerned Indian must do his bit to fight this loot for the sake of the next generation. Speaking out or standing up for what we believe in, will generate the critical mass and momentum that we need to then bring about the change we want to see.
Now in the wake of all the unrest in the country on bringing Janlokpal,CAG started functioning and doing its duty well.I appreciate CAG for doing it well..yesterday RAW and today RIL..lets see which Ministry is for tomorrow. CAG well done! Thanks to The Hindu for bringing it out to public.
This is not new. Murli Deora made billions for Reliance since Indira Gandhi and there is nothing new about it. It is shameful that media does not bring these reports out when the same person is handed over this responsibility and site the previous dealings (misdealings) of the person. Media is completely reactive and does not provide any knowledge based analysis of the person or deals they make. People just get engry when they hear the news but then they forget as next time the same people will be in news the previous deed were already erased from minds. I think one or other way media is either very stupid or have atleast some benefit in hiding the truth. Only story of happening is brought to the people and no facts / allegations / controversies come up. India unfortunately has to pass through this as there is no alternative but it is shameful that every day one or other so called Indian Leader shamelessly appear on newspaper and actually laugh on me and you. Governance / law / policing is joke in the country. We are just on the way to become another Russia.
This once again shows how the corporate people in India looting the nations wealth and resources. This is evil face of Reliance monarchy in KG-basin, which doesn't give any jobs to locals, doesn't compensate the damage to the infrastructure at that region resulting from transport and now it is even not paying genuine royalties, taxes etc. Recently, it lost the case in Supreme Court, where Ambani brothers shared nation's natural resources as their own estate. Supreme court was told that it's just a contract holder to extract the gas and crude oil. We have also seen that productivity of KG- D6 has decreased,recently. Why won't we suspect that, it's also selling the output from D6 in black market outside the nation? As the gas from KG-D6 is the cheapest on the world, many countries are interested to buy this gas from India. So, RIL might be selling this as black and showing lesser output..! They should answer these kind of questions first.!
Reliance is completely profit oriented organization.One thing that they should remember that they are in a poor country where 30 crores of people can live comfortably with half the wealth of the asset of Mr. Mukesh Ambani. They should learn from TATA group, even though it's the largest company, it gives maximum of it's profit to research organizations, and educational institutes. They established premium institutes like IISc Banaglore, TERI etc.. People are not able to understand what Reliance did for nation.?
This multitude of scams and plunder of national wealth by a handful people at helm has huge implications. It shows what this country stands for and what works here. What message should people like me who have just started their career and have to work hard to earn money derive from this? Out of this hard earned money I have to pay taxes which will any how be washed away in this river of corruption and inefficiencies. People who belong to jail and have a record of crime are at the helm of affairs and taking the country for a ride.
We are proud of our CAG, the constitutional body which is doing its job. Vinod Rai is doing to audit now, what T.N.Sheshan did to elections 20 years ago. Our Constitution drafted under the leadership of Dr. B.R. Ambedkar is no doubt a paragon of excellence, but we need visionary leaders and administrators of integrity to run it. Reliance is a company that is responsible for institutionalizing corruption in this country. Sure this story will be killed by at least some newspapers in India, in these days of paid news. The Hindu is a different, that is why we subscribe to it everyday.Thanks Mehdudia.
And yet the same Govt redefines, 'Below Povery Line 'for Indians to 1/3rd the standard set by the World Bank' and even below Sub- Saharan country levels. Reason given is 'lack of resources'. All this, while the country's resources are being given away at a pittance to the 'well connected'. For sure India is not a Democracy, but an OLIGARCHY - Govt run by a minority for the benefit of a minority .
UPA II has lauanched a stunning attack on common public by accepting bribes from private corporates and handing over all our national assets to such private companies in throw away price. Arabs streets are filled with arabs protesting against the dictators and corrupted regimes. Time is not far away in india to witness street protests against Manmohan singh and Sonia Ghandhi. But one difference, people of india will also protest against big corporates who has bribed UPA II. Rulers who accepted the bribe and corporates who has bribed - both needs to be brought in front of the law.
In this case related to scandal in petroleum and natural gas ministry, all the culprits involving the minister, RIL management needs to be put behind bars in TIHAR. HINDU should bring all the culprits, their nature of the crime, the scandals everthing to its readers.
Yet another 'scam' comes to the fore and further taints the already stained Government. Another JPC will be constituted, multiple reports will be produced, someone will be arrested...law will take its own course...it will go on and on without any end, until the nation prefers to forget the loss.
The hold of corporates on the Indian political system is once again demonstrated. Irrespective of the party in power, industrial houses continue to misuse the resources of the nation. The unholy and immoral nexus between political power and monetary hegemony is breaking the social fabric of the country. One is left wondering whether things can really be set right!
Every Minister is corrupt and makes money which the poor taxpayer pays.Even the meager interest on savings bank accounts is not spared by the tax man. The Congress government milks the tax payers and a part of this money is pocketed by Ministers and bureaucrats.This story is reported again and again and yet Mr.Pranab Mukherjee says that only the Parliament will decide about corruption. Why can not Parliament amend the Constitution and say that all Ministers and bureaucrats must be corrupt. This is in addition to the hefty pay and allowances they draw for dancing in the well of the House.This well put an end to all controversies.Such shameless people are found only in India.
For a change, a media report admits that it is a blow to Manmohan Singh when the Comptroller and Auditor General indicts a Ministry of his government for allowing 'irregularities and bending rules' to 'oblige' a private company leading to a massive and as yet 'unquantifiable' loss to the national exchequer. Will it be too much for the nation to expect a clarification from the Prime Minister on this matter?
Please Email the Editor