Baalu wants cheap gas for son’s power plant yet to come up

Sources said that Baalu has been pushing — a fact he himself admitted in Parliament yesterday — ONGC and GAIL for gas for his sons’ firms ever since it became a prized commodity. Reason: he wants gas at the administered price of $1.96 per million British thermal units (mBtu) when it’s being sold anywhere between $6-$16 per mBtu.

Selva Kumar has been writing to the Ministry and the Prime Minister’s Office that the Ministry “restore” the allocated 10,000 standard cubic metres of gas per day (SCMD) for King Chemicals and allocate 0.5 million standard cubic metres per day (MSCMD) for King Power.

Baalu, Union Shipping, Road Transport and Highways Minister, visited Petroleum & Natural Gas Minister Murli Deora’s office on June 28, 2006 where chairmen of ONGC and GAIL were summoned to work a way out, as per official records. He later called them individually to his office, admonishing them for the delay. He also got the Prime Minister’s Office to seek a status report on the gas allocation on February 4 this year.

The genesis of the controversy has its roots in the NDA government in which the DMK was a crucial ally. After meeting the then Petroleum Minister Ram Naik, Baalu got 10,000 SCMD gas allocated for King Chemicals and 0.5 MSCMD for King Power in 1999.

A gas supply agreement (GSA) was signed only for King Chemicals but the company delayed signing the transportation contract for it. After repeated extensions of the signing date, the GSA lapsed.

The issue of re-instating the gas linkage was taken to the Madras High Court where a single-judge bench ruled in Baalu’s favour. However, fearing a cut in their existing gas supply to provide for Baalu’s company, APM gas consumers in the unit’s vicinity approached the division bench of High Court which said that the issue be resolved by the Petroleum Ministry.

Baalu then started working on Deora and Secretary MS Srinivasan saying that the withdrawal in 2004 was part of a political revenge by the BJP-ruled NDA government as his DMK party quit the alliance in December 2003. “Papers show otherwise,” said sources, “and it is very difficult for us to restore gas supply to a defaulter.”

They said Srinivasan recently called for a meeting to work a way out but officials said the option was either to introduce a pro-rata cut on existing consumers in that area to provide for King Power or shift the proposed power plant to an area that could be provided the market priced gas. While the Ministry is opposed to the first option, King Power has said it will get back to the ministry on the second.

In Parliament yesterday, Baalu put up a brave face: “These shareholders (of King Chemicals) asked me to do something about them. A BIFR company has to be saved by the management. Accordingly, I put a word to my friend, the Petroleum Minister. What is wrong with that?”