ADAG questions DGH on cost validation
The ADAG said that there was a “conflict of interest” in the independent assessments carried out by various bodies appointed by the DGH to evaluate the Mukesh-managed RIL capital expenditure (capex) claims at its D6 facility in the Krishna Godavari region.business Updated: Aug 05, 2009 21:18 IST
Upping the ante in the gas tussle with his elder brother Mukesh Ambani, the Anil Dhirubhai Ambani Group (ADAG) said on Wednesday that there was a “conflict of interest” in the independent assessments carried out by various bodies appointed by the Directorate General of Hydrocarbons (DGH) to evaluate the Mukesh-managed Reliance Industries Ltd’s (RIL) capital expenditure (capex) claims at its D6 facility in the Krishna Godavari region.
Speaking at a press conference in Mumbai, JP Chalasani, CEO, Reliance Power Ltd (RPL) said Mustang International, the firm appointed by the DGH to evaluate RIL’s capex claims, had also been advising RIL in various projects and hence its evaluation on assessing RIL’s capex cannot be considered independent.
On another assessment done by the expert committee under P Gopalakrishnan — an independent expert — Chalasani said Mukesh was the first president at the Pandit Deendayal Petroleum University where Gopalakrishnan is a faculty member. Yet another member of the committee, A Mashelkar, he said, was on the board of RIL. And Kudchaker, a professor and a member of this committee, is the education advisor in RIL, Chalsani said.
Quoting an extract from the report, Chalasani cited the “grey areas”. These included the committee head (Gopalakrishnan) admitting that “he has not been able to study a few important documents, including the production sharing contract (PSC), between RIL and the government.”
The PSC, Chalasani said, is the main document being cited by the government in all its communication to the Supreme Court. He also said if the audit of RIL’s capex has been done by the Comptroller and Auditor General (CAG), the audit report must be made public.
“In the interests of transparency, and to set the matter at rest, DGH should publicly disclose the full reports of CAG and other auditors, referred to in the statement,” he said.
Confirming that an independent audit is under way of RIL’s costs in producing gas from KGD6 fields, CAG sources said the audit is still not complete. “We have sought some more information from RIL pertaining to its costs.”