RIL accuses NTPC of going back on draft gas pact | business | Hindustan Times
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RIL accuses NTPC of going back on draft gas pact

Reliance Industries has accused NTPC Chairman and Managing Director R S Sharma of going back on the terms of a draft gas sales and purchase agreement that provided for government approving its bid price of $ 2.34 per mmBtu.

business Updated: Sep 15, 2009 22:25 IST

Reliance Industries has accused NTPC Chairman and Managing Director R S Sharma of going back on the terms of a draft gas sales and purchase agreement that provided for government approving its bid price of $ 2.34 per mmBtu.

In a letter to Power Secretary H S Brahma, RIL Executive Director PMS Prasad said that the draft Gas Sales and Purchase Agreement, as finalised by NTPC in May 2005, stipulated that government approval was needed for the $ 2.34 per mmBtu price quoted by RIL in the PSU's gas supply tender.

Even "in the suit filed by NTPC before the Bombay High Court, NTPC has sought direction from the court that RIL sign the May 9, 2005 draft of the GSPA, which contains the requirement of government approval to the sale price as a condition precedent to the contract becoming effective," he wrote.

However, NTPC has now gone to Supreme Court against RIL amending its petition in the High Court to say that its bid was subject to government's pricing and utilisation policy.

Sharma had in a letter to Brahma on August 28 stated that "RIL did not mention in its bid that the price of gas shall be subject to approval of government."

Prasad said the proforma GSPA in NTPC's 2004 tender had Schedule 3.2 that related to Condition Precedents for both seller and buyers that were to be filled at the time of signing of GSPA and government approval of the price was included in the draft GSPA that was agreed to by NTPC in May of 2005.