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“D6 Contract Should Be Reviewed”

“D6 Contract Should Be Reviewed”
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-0001-11-30T00:00:00+0553

Next week, the public accounts committee (PAC) will be seeking answers from RIL executives on charges of having availed undue concessions, levelled by the Comptroller and Auditor General (CAG), concerns which have been aired by CPI(M) Rajya Sabha member Tapan Kumar Sen. Excerpts from an interview:

What has been the impact of the lower gas production from the Krishna-Godavari basin?

It is creating serious problems for fertiliser and power generation units. The drop in K-G gas production has led to an estimated Rs 15,000 crore direct loss to the energy economy.

Are you going to bring up this issue in Parliament?

Let us see how the government responds. They have not responded to any of my queries in the last few years—I am not too optimistic.

Is there a case for upward revision of gas prices at par with international trends?

Why should domestically produced gas be priced at international rates? Nowhere is it done. RIL is using coercion to force the government to go in for early price revision for K-G gas by reducing production. As it is, the price they are enjoying is highly inflated. In the international competitive bidding tender of ntpc for the Kawas and Gandhar power plants, RIL quoted $2.34 per million btus. They would surely not have done that without keeping a profit margin. Later, RIL quoted $4.3 per million btus as the discovered price to the empowered group of ministers. To appease critics, the empowered group fixed the gas price at $4.2 per million btus. I think the issue of fixing the gas price needs to be probed thoroughly. The truth should be brought out.

What are the options before the government?

I’d like the whole production sharing contract (PSC) to be reviewed and, if required, cancelled if they cannot keep the contractual commitments. The PSC is a very weak document and needs to be strengthened in favour of the government. Finally, the decision is up to the government. They have to decide.

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