Terming the ouster of Jaipal Reddy from the Petroleum Ministry unfortunate and anguishing, Communist Party of India (CPI) Member of Parliament Gurudas Dasgupta on Thursday asked Prime Minister Manmohan Singh to serve a fresh notice on the Mukesh Ambani-owned Reliance Industries Limited (RIL) and restrict the cost recovery for 2012-13 by $1.72 billion for the shortfall in gas production from the KG-D6 gasfields in Andhra Pradesh.
In a letter to the Prime Minister, Mr. Dasgupta said the country expected a statement from him on this matter either now or on the floor of the House during the winter session of Parliament. “If my letter is ignored, like my letter on the 2G spectrum scam, I am constrained to add that this will lead to a huge uproar,’’ he warned in his letter dated November 1.
“You are aware that Mr. Reddy imposed a fine of $1 billion on RIL to restrict cost recovery due to shortfall in production in 2011-12. If we consider the current year’s shortfall, the implication is even more startling. Against the cumulative production target of 2.957 trillion cubic feet (tcf) to be achieved by the end of the current year, RIL has said it will produce only 1.847 tcf of gas. By the same logic that was applied to last year’s shortfall, the government should give a fresh notice to RIL, restricting cost recovery by $1.72 billion in the current year corresponding to a cumulative shortfall of 38 per cent. For the years 2013-14, based on RIL’s own projections and the government approved principle of proportionate restriction of cost recovery, there should be a notice to restrict cost by $2.1 billion. Will the government have the gumption to impose these huge fines after changing an honest Minister like Mr. Reddy? Does not the giant monopoly company, which violates contract with impunity, attract criminal liability and will the government not act against it? Does this antinational act of RIL have any bearing on the recent reshuffle?’’ Mr. Dasgupta wrote.
Projects cancelled
In another example, the CPI leader said four pipeline projects, which were awarded to RIL-owned RGTIL, were cancelled by the Petroleum Ministry during Mr. Reddy’s tenure after taking inputs from the downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB). This was done because RIL was not making any progress in construction of these pipelines.
On another issue, the Petroleum Ministry decided that the marketing margins of the monopoly supplier should be regulated and it should have a bearing on the actual cost incurred by the company, and could not be fixed arbitrarily. This matter was also referred to the PNGRB for adjudication.
“Mr. Reddy was taking action as per law against RIL on all issues and was, therefore, removed to accommodate their interests,’’ Mr. Dasgupta alleged.
He said that though the choice of Ministers in the Cabinet was the prerogative of the Prime Minister, it was an ominous sign for the country when corporates played a role in selecting ministers and their portfolios. This indicated the government was under duress and did not have any credibility, the letter added.
The veteran leader alleged that RIL was cheating the country by demanding an increase in the price before the end of the deadline of April 2014.
“They have deliberately reduced production from 80 mmscmd to 27 mmscmd in the current year and have threatened to reduce it further by 18 mmscmd next year. The fallout of this is that we are losing power to an extent of 12,000 MW. Next year the shortfall will be to the order of 13,500 MW. If we could substitute this with costly imported gas, the extra subsidy burden on fertilizer and power in the current year would be Rs. 40,000 crore. This figure was Rs. 20,000 crore in the year 2010-11. Next year, with an anticipated shortfall of 62 mmscmd, this will translate to a loss of Rs. 48,000 crore. Thus the loss to the country in the three years due to shortfall in production would be a whopping Rs. 1,10,000 crore,’’ he concluded.
