Govt clears the air on KG gas controversy | business | Hindustan Times
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Govt clears the air on KG gas controversy

The government on Friday came out strongly against the allegations levelled by the Anil Dhirubhai Ambani Group against the petroleum ministry through an advertisement campaign over the last few days, reports Anupama Airy.

business Updated: Aug 21, 2009 21:49 IST
Anupama Airy

The government on Friday came out strongly against the allegations levelled by the Anil Dhirubhai Ambani Group (ADAG) against the petroleum ministry through an advertisement campaign over the last few days.

“The government is of the view that such an advertisement campaign on the eve of the hearing in the Hon’ble Supreme Court is most unfortunate,” a statement released on Friday evening by the government said.

The government also said that it is committed to “upholding the rule of law” and that “it cannot enter into needless and unnecessary controversies”.

In view of the fact that the matter is sub-judice before the Supreme Court, the government said it is resorting to limited clarifications so that there is no element of public misinformation.

On the allegation made by ADAG that in the contract of KG-D6 project, the government would get only Rs 500 crore as against the contractor’s (Mukesh Ambani’s Reliance Industries Ltd) stake of Rs 50,000 crore, the statement said, “ This allegation is incorrect and the government expects to realise about Rs 84,000 crore. The recovery of the Government will be increased towards the latter part of the project.”

ADAG had also alleged that the ministry of petroleum and natural gas is seeking to cause loss to state-owned NTPC. To this the government clarified that the petroleum ministry is committed to protect the interests of NTPC by all means.

On gold-plating of KG-D6 capital costs from Rs 12,000 crore to Rs 45,000 crore, the government justified the increase — reserves, it said, increased by 2.5 times, peak production doubled and production facilities tripled.

The government further clarified that the price of gas, at $4.20 (about Rs 205) per unit, was fixed by an Empowered Group of Ministers.

“The price formula is based on the principle of ‘arm’s length’ and in accordance with the provisions of the production sharing contract (PSC),” the statement said.