Makarand Gadgil

Also see End game & Fanning the flames

The minutes of the meeting  of the Empowered Group  of Ministers (EGoM)  held on 12 September,  2007 that form part of the  government’s submission  clearly state that the decisions taken by  the EGoM will be “without prejudice” to  the NTPC vs RIL and RNRL vs RIL cases  which are separately subjudice.”  “The government’s submission clearly  strengthens Anil Ambani’s case and goes  against government’s stated position  that the agreement between RIL and  RNRL is a private arrangement,” said  Hiroo Advani of Mumbai-based law firm  Advani & Co. �
Meanwhile, in a new twist to the case,  RIL has written to the power secretary  complaining about NTPC’s “reluctance”  to conclude the gas sales and purchase  agreement (GSPA) for the 2.7 mmscmd  gas allocated to it for the Faridabad, Dadri  and Anta plants.       RIL’s PMS Prasad claimed that despite  RIL being ready to sign the GSPA which  includes clause, “without prejudice to  ongoing case between the RIL and NTPC at Bombay high court”, NTPC is not  ready to discuss the GSPA and it will cost  the company an additional Rs 15,000  crore should it decide to import LNG  instead of buying RIL’s KG basin gas.  Till date none of its submissions – in the  Bombay High Court in the RIL vs RNRL  and RIL vs NTPC – spell out the position  stated in the EGoM minutes. In fact,  using the EGoM’s decision to fix the price  of gas at US $ 4.2 mmBtu RIL amended  its plea in the Bombay High Court in  case against NTPC. Now NTPC wants to  challenge the decision allowing change  of plea.

In fact, petroleum minister Murli  Deora had said on the floor of Rajya  Sabha that the US $ 2.35 mmBtu price  quoted by RIL in the NTPC tender was  not approved by the government and  therefore not applicable. 

The government’s latest submission  quoting an earlier ministerial decision  “sounds like an afterthought. The law  cannot make a distinction between the  self-interest of a public sector commercial  unit and a private sector one,” said a  senior power ministry official. Added  Advani, “Both NTPC and RNRL are  listed companies, how can one distinguish  between the two just because in one  government owns a majority stake?”  Ashok Sreeniwas of Prayas (Energy  Group) said, “The correct stand for the  government would be to not stress on  NTPC’s PSU status but to emphasise  that NTPC had called for a global tender  and RIL had participated in it without  putting any conditions.

 Added Advani,“The correct stance for NTPC to protect  its interest would have been to be party  to the RIL vs RNRL case. But it looks as  though the government wants to avoid  NTPC joining issue in the Apex Court.  If the court decides to club both petitions  then the government’s case doesn’t have  a leg to stand on.” If the court were to  club the cases then the pricing of gas will  apply to both RNRL and NTPC.  As things stand, it seems as if the ADA  Group Rs 12 crore media blitzkrieg is  finally paying off in NTPC’s favour.

Also Read

• We are setting up two SPVs for renewables and consortium financing: Satnam Singh, CMD Power Finance Corp
• I want to focus on the next five years: Sushilkumar Shinde, power minister
• ONGC: Getting closer to the vision
• By 2017, we aim to become a 4,000 Mw company: H K Sharma, CMD, SJVNL
• West coast refinery to start by 2015 : Roy Choudhury