Tuesday, Oct 21, 2014

Arvind Kejriwal rakes up K G Basin gas pricing, orders FIRs against Moily, Deora, Mukesh Ambani

Ours is a decisive battle. Corruption percolates from above and we will take action against top leaders, said  Arvind Kejriwal, Delhi CM Ours is a decisive battle. Corruption percolates from above and we will take action against top leaders, said Arvind Kejriwal, Delhi CM
Express News Service | New Delhi | Posted: February 11, 2014 11:26 am | Updated: February 12, 2014 9:23 am

Firing A high-profile salvo in what he called was the Aam Aadmi Party’s battle against corruption, Delhi Chief Minister Arvind Kejriwal Tuesday ordered the state government’s Anti-Corruption Branch to register FIRs against Petroleum Minister Veerappa Moily, Reliance Industries chairman Mukesh Ambani, former minister Murli Deora and former DG of Hydrocarbons V K Sibal in a long-running controversy over alleged irregularities in the pricing of natural gas from K G Basin.

Kejriwal also demanded the Centre put on hold the move to raise gas prices from April 1 until the probe was completed.
His allegations against a serving and a former Congress cabinet minister and one of India’s top industrialists follow his targeting of power distribution firms belonging to

Mukesh Ambani’s brother Anil Ambani’s business group, Congress’s previous chief minister Sheila Dikshit and Union Home Minister Sushil Kumar Shinde.

ALSO READ: How and why PM’s advisor defended gas price formula

Last month, he also released a list of 28 prominent politicians who he alleged were corrupt. The list included Congress vice-president Rahul Gandhi and 13 others from the party that supports Kejriwal’s AAP in the Delhi Assembly.

The chief minister said his move was prompted by a complaint his office received from former cabinet secretary of India T S R Subramanian, former expenditure secretary E A S Sarma, retired admiral R H Tahiliani and advocate Kamini Jaiswal.
Moily hit-back at Kejriwal saying gas prices were fixed on the advice of experts.

“I think I should sympathise with his ignorance. He should know how the government functions, how these things are done. You should know that I took special interest to ensure that CNG and PNG prices were reduced,” Moily said. “He thinks that it’s just like taking water through a bucket from a well. He cannot take oil like that.”

Reliance said the Delhi government decision was shocking.

“The complaint and each of the allegations on the basis of which the Delhi government has taken such action are completely baseless and devoid of any merit or substance whatsoever,” it said in a statement.

“The allegations appear to have been made by persons who are also petitioners in the Supreme Court of India in a petition in which similar allegations have been made. The issue of gas pricing is also a contentious issue between the contracting parties being the Government of India and the contractors,” it said.

“We deny these irresponsible allegations and propose to resort to the available legal remedies to protect our reputation and preserve the pioneering efforts and investment made by Reliance so far. We also remain fully committed to the development of oil and gas sector in India within the parameters of law,” Reliance said.

A senior ACB official said the FIR would be registered under IPC sections that will cover crimes such as anti-national activity, fraud, conspiracy and cheating and the Prevention of Corruption Act.

The Delhi government, the official added, had jurisdiction over the case.

“Existing laws and rules empower the ACB to take up the probe into complaints of corruption. The ACB enjoys concurrent powers like the CBI to investigate corruption cases. Since most of the alleged offences, including the decision to finalise the exorbitant hike in prices of gas, have been committed in Delhi, the investigation can be referred to the ACB,” he said.

The complaint to the ACB claimed the production cost of gas from the fields is less than $1 per million British thermal unit (mBtu) by Reliance’s own admission. A 17-year supply contract signed with NTPC in early 2000 agreed to supply gas at $2.34 per mBtu. However, in a few days, the price was raised to $4 per mBtu in collusion with a few Union ministers, the complaint alleged.

Also, Kejriwal alleged that the production was kept low to blackmail the government. This created an artificial shortage and gas had to be imported, leading to inflation, he alleged.

“The report on production for the week 10-16 June 2013 states that only nine out of 18 wells are in production in the KG-D6 basin and remaining are closed. Gas sales are at a mere 18 per cent and the ministry, instead of taking action and cancelling this block allotted to RIL, colluded with it and has now given into its unconscionable demand of doubling the gas price to put an unbearable burden on the people,” Kejriwal claimed.

Quoting the complaint, he said Reliance and the Central government had colluded to double gas prices to $8 per mBtu from April 1, 2014.

“The gas that should have been priced $1 will be sold at $8. The gas is from our country’s reserves and the allegation in the complaint is that gas prices were fixed as per international prices and not on the basis of cost of production,” the chief minister alleged.

He also claimed that RIL’s partner Niko was supplying gas at $2.34 per mBtu to Bangladesh. “That means we are getting gas that is costlier than what it is in Bangladesh,” he alleged.

“In case the price is raised, it will have a spiralling effect on the common man’s pocket. The price hike would impact prices of CNG and PNG. Farmers will suffer as prices of fertilizers will increase and so would prices of electricity being generated from gas-based power plants,” said Kejriwal.

Reliance, he claimed, would stand to gain Rs 54,000 crore per annum after the price increase. The Delhi government statement also cited a CAG report which alleged irregularities by RIL in the project including an increase in capital expenditure. DGH Sibal, Kejriwal alleged, showed unseemly haste in accepting the capital cost increase.

He also alleged that the government had allowed Reliance to recover its investment two times by approving a 30-per cent stake sale in 21 of the 29 blocks to British Petroleum in July 2011 for $ 7.2 billion.

Kejriwal said he would write to the PM demanding that gas prices not be raised until the ACB probe is completed, that ministries cooperate in the probe and if Reliance cannot produce enough gas, the wells be given to ONGC and other PSUs.

“Ours is a decisive battle. Corruption percolates from above and we will take action against top leaders,” Kejriwal said.

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