Gas stand confusion over: Govt

The government has cleared its own confusion on the marketing rights enjoyed by Reliance Industries over the natural gas it discovered in the D6 block of the Krishna Godavari basin.

Emerging from the final meeting of the group of ministers (GoM) on gas pricing, law minister Verappa Moily told reporters the government’s stand on the issue has been finalised and that the GoM will not meet again.

The group was set up by the Prime Minister two weeks ago after statements by the petroleum ministry in the Supreme Court and the Parliament directly contradicted what government lawyers representing the National Thermal Power Corp (NTPC) were saying in the Bombay High Court.

Besides Moily, the group comprises petroleum minister Murli Deora, power minister Sushilkumar Shinde and finance minister Pranab Mukherjee.

Moily, however, did not clarify what the new stand will be. “That you can see in the Supreme Court... Now the ball will be in the court of Supreme Court,” Moily said, when asked what the new stand of the government will be in the dispute.

Power secretary HS Brahma, under whose ministry NTPC falls, too said all “legal issues” around the issue have been resolved and that NTPC will soon file a petition in the SC stating its position. “NTPC has cleared all legal issues in the case, and it hopes to file a special leave petition in the SC in the next six to seven days to protect its interest,” he told reporters in Delhi.

The move comes after the two top government lawyers — attorney-general Goolam E Vahanvati and solicitor-general Gopal Subramaniam — weighed heavily in favour of the public sector company intervening in the Supreme Court to protect its interest.

NTPC had requested their legal opinion soon after the petroleum ministry filed an affidavit in the Supreme Court stating that RIL had, in effect, no right to promise gas to NTPC at the rate it offered in a tender process in 2004.

Soon after receiving the legal advice, NTPC had shot off a letter to power secretary Brahma urging him to “take up” the matter with the petroleum ministry and make sure that the latter’s statements does not jeopardise NTPC’s rights to RIL’s gas.

The letter, dated August 21 and signed by NTPC chairman R S Sharma, disputed RIL’s argument that the supply of gas was always conditional on government approval.

“While submitting its bid [to supply gas] to NTPC in 2003, they [RIL-Niko] were fully aware of the provisions of the production sharing contract. RIL, in its bid, never stated that the contract shall require the government’s approval... In view of the above, it is requested that the ministry of power… ensure that NTPC’s right for the gas at a price of $2.34 is protected and the special leave petition filed by the ministry of petroleum and natural gas does not prejudice or jeopardise the right of NTPC,” Sharma wrote.

The Anil Ambani group, which has been running a series of ads hinting that the stand of the ministry of petroleum is causing a loss of Rs 30,000 crore to NTPC, claimed the power ministry’s move to file an affidavit in the SC as a victory.

Legal experts speculated that NTPC’s petition in the SC may come either in the form of an appeal of the Bombay High Court judgement allowing RIL to include the petroleum ministry’s stand in its defence, or in the form of an intervention in the Ambani dispute.

“The only other legal option before NTPC is to file for a transfer of the ongoing case in the High court to the Supreme Court, which is very unlikely,” said a prominent Delhi-based lawyer.

The Supreme Court is expected to take up the matter on September 1.