Oil field regulator rejects Anil Ambani's charges on RIL
Oil and gas field regulator DGH rejected industrialist Anil Ambani's charges that it had approved Reliance Industries Rs 45,000-crore "exorbitant capital expenditure" plan for gas fields, saying the actual expenditure is subject to three audits including one by CAG.business Updated: Aug 04, 2009 17:28 IST
Oil and gas field regulator DGH on Tuesday rejected industrialist Anil Ambani's charges that it had approved Reliance Industries Rs 45,000-crore "exorbitant capital expenditure" plan for gas fields, saying the actual expenditure is subject to three audits including one by CAG.
The Production Sharing Contract (PSC) provides for auditing of the actual expenditure by three sets of auditors -the management committee appointed auditors, government appointed auditors and by the Comptroller and Auditor General of India (CAG).
"The CAG team has carried out the audit work," said VK Sibal, Director General, Directorate General of Hydrocarbons in a three-page post on the DGH's official website.
RIL is investing $8.836 billion (about Rs 42,500 crore) in developing the Dhirubhai-1 and 3 gas finds in block KG-D6 - first two of the 18 gas finds in the block.
"The idea of gold plating betrays a lack of knowledge of business economics. Inflating the expenditure does not benefit any stakeholder- neither the contractor nor the government. No company would like to increase its investment unproductively. Every additional dollar of wasteful investment dents the profit of the contractor," Sibal said without naming Anil.
Anil had yesterday demanded "an independent and objective re-examination by public accountability bodies like the CAG and the CVC of the apparently exorbitant capital expenditure of Rs 45,000 crore... in order that such capex recovery is brought down to realistic levels."