NTPC-RIL, RNRL-RIL deals are not same, says govt

The Union government on Wednesday filed its affidavit before the Supreme Court that’s seized of the gas dispute between the concerns led by the two Ambani brothers, saying the arrangement for public sector NTPC can’t be equated with any agreement between RIL and RNRL.

The detailed affidavit moved by solicitor-general Gopal Subramanium says the government will take an appropriate decision in the case of NTPC as and when a need arises. “Such a decision based on public interest, if in favour of NTPC, cannot be termed as discriminatory or arbitrary,” it adds.

The government’s response came following RNRL counsel Ram Jethmalani’s consent to the Centre becoming a party to the lawsuit. “It may be pointed out that since there exists an ongoing suit between NTPC and RIL, the decisions of the central government were stated to be without prejudice to the rights of NTPC,” the government adds.

Any request of NTPC for supply of gas will be considered by the government in the light of the relevant provisions of the production sharing contract (PSC), it assures. However, Jethmalani intervened during the hearing that started on October 20 last, saying the government’s affidavit “extinguishes NTPC”.

“NTPC should come here and confirm whether they are ready to commit suicide,” he contended. Addressing a bench of chief justice KG Balakrishnan, Justices B Sudershan Reddy and Justice P Sathasivam, he said “it’s not a case of sinking and swimming
together”.  “If [the] NTPC contract fails, [it] does not mean that RNRL contract also fails. In fact RNRL gets 12 mmscmd of gas,” Jethmalani added. Picking up from where Jethmalani had left the chord, Mukul Rohatgi, also counsel for RNRL, agreed to the court’s observation that the high price for the Krishna-Godavari gas will add to the costs of power and fertiliser units, and even burden the government with extra subsidies.
Counsel also sought to explain how the electricity tariff may even shoot up to Rs 15 per unit, even though there had been a hue and cry in Delhi when the tariff had been hiked 25% to Rs5 per unit.

“The government will be left to subsidise the prices of power and fertilisers,” counsel added. The judges had a query: How did RNRL propose to use the gas, as the Dadri power project in Uttar Pradesh, for which it was initially intended, is yet to be commissioned?

“Your plant is not ready. What will you do to the gas?” the judges asked Rohatgi.
Rohatgi said RNRL intends to procure the gas at $2.34, as originally agreed, and earn some profit by supplying it at $4.20 per unit to the same consumers to which RIL has been selling.

“It’s true the Dadri plant is not ready and will not start before another three years or so,” he said, adding: “I can re-supply the gas to the same consumers whom the RIL is supplying and make a profit.”

This, he said, would “only be a pro tem (temporary) arrangement” and would compensate RNRL to some extent because RIL is responsible for delaying the Dadri project.
RIL has to supply gas to RNRL only for 17 years for the Dadri plant and if it starts supplying now, the profit earned by RNRL at the beginning could be used for buying the fuel for the last three years of the supply tenure, Rohatgi explained.