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Home News Power Sector News Reliance breached gas contract with NTPC: Jairam Ramesh

Reliance breached gas contract with NTPC: Jairam Ramesh

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RIL has not fulfilled its obligation for supply of gas to NTPC - Jairam RameshOn 11-11-2008, Jairam Ramesh, Minister of State for Power said that Reliance Industries has breached the gas sale contract that it had with NTPC. Ramesh is known for close relations with corporates, but on Tuesday, perhaps exasperated with the delay in the supply of RIL’s gas to its power plants, he criticized the country’s largest company.The minister said that it is time RIL honours a perfectly valid contract on gas supply. “There was a letter of intent (LoI) placed on RIL and as far as NTPC is concerned RIL is in breach of that contract. So, there is no dilution at all in NTPC's position whatsoever,” said Ramesh.

RIL's $2.34 per mmbtu bid won NTPC's favour in 2004, but after issuing the letter of intent Reliance refused to sign the final contract saying it cannot supply gas at such a low price.

Power Ministry  already filed an affidavit in the Bombay High Court opposing the plea of the Petroleum Ministry to get the stay vacated on the gas sales. Power Ministry sources said it had decided to back the National Thermal Power Corporation (NTPC) on the issue and has given the go ahead for filing an affidavit against the Petroleum Ministry plea. “NTPC has a water tight case. and giving concrete shape to the contract with NTPC. We are with NTPC on the issue and will not allow anyone to hijack the case on some pretext or the other,” a senior Ministry official remarked. Refusing to comment on the legal proceedings and the shape of the case, Minister of State for Power Jairam Ramesh said NTPC’s interest was national interest and there would be no compromise on that issue.
However, Ramesh's comment may trigger yet another debate, as it’s the first time someone from the government came out and said that RIL has breached the contract with NTPC. Meanwhile, in a separate litigation that is fought between the Ambani brothers, Mukesh and Anil, over the KG basin gas, the court on 11-11-2008, directed the government to file a separate affidavit on pricing.

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