NTPC poohs RIL claim in gas row | business | Hindustan Times
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NTPC poohs RIL claim in gas row

business Updated: Sep 03, 2009 23:05 IST
Anupama Airy

Rubbishing claims by Mukesh Ambani-led Reliance Industries Ltd (RIL), state-owned NTPC Ltd has reiterated to the power ministry that RIL never mentioned in its global bid that the price of its KG-D6 gas from the Krishna-Godavari basin was subject to government approval.

Reacting to RIL’s letter to the ministries of power and petroleum last week, the chairman and managing director NTPC, R.S. Sharma said, “NTPC reiterates that RIL did not mention in its bid that the price of gas shall be subject to the approval of the government.”

RIL had accused NTPC of “misleading the government” and said the public sector firm was stating it as an afterthought as it was not aware of the requirement of the gas price approval under the production-sharing contract (PSC) for the KG-D6 block.

“Nothing can be further from the truth,” president and CEO of RIL’s Petroleum Business, P.M.S. Prasad had said in his letter to the petroleum and power secretaries.

“NTPC’s letter to the government at this stage is clearly an afterthought intended to mislead the government. This position had accordingly been conveyed by RIL to NTPC in no unambiguous terms,” RIL had said.

RIL said as part of the NTPC tender process, Article 3.2 of the draft Gas Sales Purchase Agreement (GSPA)… attached by NTPC itself specified as one of the conditions precedent that the “Seller shall have obtained Approval under Laws”.

Sharma said this was a later development, and not preceding the bid.

“The conditions precedent in the draft GSPA contained in bidding documents relate to the matter subsequent to the submission of bid and placement of the letter of intent,” he said.

Prasad had written that NTPC had in fact “insisted upon and agreed to its (approval’s) inclusion as a condition precedent to the gas supply agreement.”

RIL signed the PSC with the government in April 2000. It said NTPC was well aware of the provisions of the pact.