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Home News Power Sector News Persuading NTPC to pay higher price for RIL gas is mega scam - RNRL

Persuading NTPC to pay higher price for RIL gas is mega scam - RNRL

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Mumbai High Court Anil Ambani group firm  Reliance Natural Resources Ltd (RNRL) said in the Mumbai High court on 16-01-2009 that the central government can persuade public sector NTPC to pay higher price by using its voting power as a majority shareholder and in case the power PSU is made to pay higher price, it will tantamount to a MEGA SCAM. Centre Government had said to Bombay High Court on 13-01-2009 that state-owned NTPC would not be allowed to buy KG gas at less than USD 4.20 a unit even though they had a contract with RIL for USD 2.34.

RNRL, which is seeking a stake in the total output of natural gas and at the NTPC price that is 45% less than the price of $4.20 per mBtu set by the government, said that if the utility firm—“persuaded by the government of India’s voting power”—bought gas at the government price, it would have to fork over Rs25,000 crore more. Calling the government filing “mischievous and misleading and mala fide”, RNRL’s filing in Mumbai High Court said that the RIL-NTPC agreement was “an arm’s length contract and neither the ministry nor the EGoM nor the government…can modify it”.
Anil Ambani’s RNRL struck out at the Union government in an affidavit filed in the Bombay high court, saying it “has no right as an intervenor to lead any evidence or file any affidavits”.

Reliance Natural Resources Ltd  said in the Bombay High Court that the government's decision on gas price from KG basin will have no bearing on either the RNRL-RIL or the RIL-NTPC agreements.

In its counter affidavit to the government, which stated that as per the decision of the Empowered Group of Ministers the price of KG basin gas cannot be less than USD 4.20 per mmBtu, RNRL said EGoM's decision was applicable to only future contracts. Bo th NTPC and RNRL are seeking gas from RIL at USD 2.34 under the their respective agreements.

“The government does not have a right to overturn solemnly entered into contracts by an executive decision,'' RNRL said. The Anil Ambani group firm said that RIL has complete freedom to sell gas at a price negotiated between the parties but the gas to be supplied to RNRL cannot be at terms worse than the NTPC draft agreement. RNRL price can be lower than NTPC but not higher, it said.

The Anil Ambani company is seeking rights to 28 million metric standard cubic metres of gas a day (mmscmd) for 17 years at a concessional rate of $2.34 per mBtu, citing a family memorandum of understanding (MoU) based on which the Reliance group was divided between the two brothers in 2005.RIL is disputing this claim before a two-member bench of the Bombay high court.RNRL’s plea for gas at the lower cost is, ironically, based on an NTPC tender offer in which RIL, in its winning bid, had offered to sell gas at the lower price.

Source – PTI

 

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