After taking on Congress president Sonia Gandhi's son-in-law Robert Vadra and BJP president Nitin Gadkari, anti-corruption activist-turned-politician Arvind Kejriwal on Wednesday charged Mukesh Ambani, India's richest man and chairman of Reliance Industries Limited (RIL), with getting undue favours from the government over a contract to develop natural gas fields.
The allegations pertain to RIL's D-6 block in the Krishna Godavari (KG) basin, India's largest gas producing field off the eastern coast in Andhra Pradesh, which is being jointly developed by RIL and its partners, Britain's BP and Canadian firm Niko Resources.
Kejriwal and his colleague, lawyer Prashant Bhushan, termed the deal a "classic case of crony capitalism" and said both the BJP-led National Democratic Alliance (NDA) and Congress-led UPA (United Progressive Alliance) governments were responsible for RIL getting this contract.
The contract, signed in 2000 by the then NDA government, according to Kejriwal, would rob the national exchequer of revenues to the tune of Rs. 45,000 crore if RIL's demands for a higher price for its gas were met.
The government has not decided yet on a demand by RIL to raise the price of gas from the field to $14.25 per unit from $4.25, the subject of a long-running controversy.
In a brief statement, RIL dismissed the charges as being "devoid of any truth or substance".
Arvind Kejriwal, Prashant Bhushan and Manish Sisodiya address a press conference in New Delhi. HT/Sonu Mehta
"Irresponsible allegations made by IAC at the behest of vested interests without basic understanding of the complexities of a project of this nature do not merit a response," it added.
Petroleum minister Veerappa Moily refused to comment.
"I have better things to do," he said.
"I don't want to respond."
The press conference also witnessed high drama when a Congress worker wanted to question Kejriwal, but was heckled by camerapersons and IAC volunteers, and forced to leave the venue.
Kejriwal based his attack on the government and RIL on the so-called 'Radia tapes', a collection of phone taps from between 2007 and 2009 in one of which someone thought to be former prime minister Atal Behari Vajpayee's son-in-law Ranjan Bhattacharya is heard telling RIL and Tata Group's corporate lobbyist Niira Radia that Ambani had told him that "Congress to apni dukaan hai".
The unearthing of the Radia tapes had triggered accusations of corporate influence in the distribution of ministers' portfolios in the UPA's second term.
On Wednesday, Kejriwal gave this accusation fresh legs by linking Jaipal Reddy's removal from the petroleum ministry on Sunday to his run-ins with RIL over the pricing of gas.
He also gave a populist spin to his allegations by linking the government's restriction on the supply of cheap LPG cylinders to the public to the high profits being allowed to RIL.
"We want to know why the PM's heart beats only for RIL. Why did he not seek the attorney general's opinion when NTPC was not getting gas at cheap rates?" Kejriwal said.
State-run National Thermal Power Corporation (NTPC) had sought cheaper gas to fire its power plants.
India Against Corruption's main allegations:
* In 2006, Mani Shankar Iyer was removed and Murli Deora brought in to increase RIL capex from $ 2.39 billion to $ 8.8 billion and to increase gas price from $2.34 per mmBTU to $ 4.2 per mmBTU
* In 2012, Jaipal Reddy has been removed and Moily brought in to increase gas prices from $ 4.2 per mmBTU to $ 14.2 mmBTU and to condone RIL’s blackmailing of reducing gas production
* Both BJP and Congress involved. BJP signed a sweet deal with RIL in 2000. Congress faithfully implemented it
* If RIL demand of increasing the gas price to $ 14.2 is accepted, it would lead to shut down of several gas based power plants and increase in power and fertilizer prices
* By this deal, RIL would benefit by an additional Rs. 43,000 crore
* In Nira Radiia tapes, Ranjan Bhattacharya (Vajpayee’s son in law) is heard telling Nira that Mukesh Ambani told him –“Congress to ab apni dukaan hai”
* Huge benefits given to RIL in last one decade despite flagrant violations of various agreements by RIL. Benefits to RIL causing serious price rise in the country.
* "In order to pressurize the government, RIL substantially reduced its production of natural gas. Total consumption of natural gas in the country is 156 mmscmd. According to agreement, RIL was supposed to produce 80mmscmd (more than 50% of the total demand) from 2009."
* "RIL got this contract during NDA regime in the year 2000. The contract was meant to favor RIL right from the beginning. In any business, increase in costs means decrease in profits."
The IAC press release alleged that performance of RIL so far has been much worse than perhaps the worst performing government department.
1. 4 times cost escalation within 2 years from $ 2.39 billion in 2004 to $ 8.8 billion in 2006.
2. Increase in gas price from $ 2.34 per mmBTU in 2004 to $ 4.2 per mmBTU in 2007 to the present demand of $ 14.2 per mmBTU.
3. Capacity created for producing 80 mmscmd after incurring such a huge cost ends up producing just 27 mmscmd after 12 years.
4. 31 oil wells should have been in production till now. Out of them, just 13 are functional.
Kejriwal and lawyer Prashant Bhushan, a leading member of IAC, alleged the allocation of KG Basin to Reliance is on similar lines as coal block allocation scam. They alleged both Congress and BJP were in 'Ambani's pocket'.
(IAC allegations mentioned in the story taken from website www.indiaagainstcorruption.org)