The Congress has slammed India
against Corruption activist Arvind Kejriwal's allegations that 'the
Congress and the BJP are in Ambani's pockets'. "After Mani Shankar Aiyar
was removed, the government took decisions to hike gas prices and
increase in capex resulting in much bigger loss to the government of
India," IAC member Prashant Bhushan alleged.
However, Aiyar slammed these allegations saying, "No issue related to
gas issue or capex had come before me on the day I was removed. There
was no issue of Reliance before me till I was removed. I had no idea at
all that these issues would be coming up. I don't know why I am being
dragged into this, I don't want any certificate from Prashant Bhushan."
He also added, "How can Prashant Bhushan jump to a conclusion till the
time government takes a decision on issues raised by Jaipal Reddy?"
The Congress sought to turn the table on the activist questioning the
source of funding of India Against Corruption. "It is baseless. Nowadays
it is fashionable of IAC to make accusations. From where you are
getting funds? Who is funding the IAC... It is Ford Foundation from
Ramlila Maidan to this press conference," AICC general secretary BK
Hariprasad told reporters.
Meanwhile,
Reliance Industries Limited
on Wednesday dismissed all allegations made by Kejriwal and Prashant
Bhushan saying the statements were devoid of any truth. Reacting to the
allegations made by Kejriwal and Bhushan at a press conference in New
Delhi, Mukesh Ambani-led RIL issued a statement saying, "The statements
made by IAC in the press conference today are devoid of any truth or
substance whatsoever and are denied."
RIL, instead, said that the KG-D6 basin is a project that the country
must be proud of as it has added great economic value. The statement
said, "The deep water exploration project in the KG-D6 basin has
deployed the best technical resources and has been recognised by the oil
and gas industry as one of the very best in its class."
"This project has added great economic value to the country and by all
accounts is a project of which India can be justly proud," it further
said. During the press conference of the IAC, Kejriwal had demanded that
RIL's KG Basin contract should be cancelled immediately.
RIL further termed that charges made by Kejriwal and Bhushan as
irresponsible and alleged that they were made at the behest of vested
interests. "Irresponsible allegations made by IAC at the behest of
vested interests without basic understanding of the complexities of a
project of this nature do not merit a response," said the statement.
Kejriwal on Wednesday questioned whether Prime Minister Manmohan Singh
is succumbing to corporates under compulsion or out of ignorance. He
also blamed the previous NDA government of providing undue benefits to
the RIL in its regime. Kejriwal also demanded that the KG Basin contract
be cancelled and the government should immediately put in place
adequate systems to get full production from KG Basin at cheapest prices
for the country.
He has alleged that cabinet ministers are being replaced at Mukesh
Ambani's insistence. Jaipal Reddy was replaced by Veerappa Moily as
Petroleum minister since he was unwilling to raise gas price. In 2006,
Murli Deora replaced Mani Shankar Aiyar to increase RIL's cap. EGOM
headed by Pranab Mukherjee revised gas price in 2007 at RIL's
insistence. "Sweet deal on gas contracts signed during NDA regime,
implemented by Congress," he said.
"Hike in gas prices will benefit RIL by Rs 43,000 crore. In 2000, NDA
had favoured Mukesh Ambani's Reliance. RIL keeping gas prices low to
blackmail the government. Benefits to RIL causing price rise. Jaipal
Reddy was replaced with Veerappa Moily to raise gas prices. Both
Congress and BJP are in Mukesh Ambani's pockets. Mani Shankar Iyer was
removed and Murli Deora brought in to benefit Reliance," he said.
The IAC first played the controversial Nira Radia tapes where Ranjan
Bhattacharya (Atal Bihari Vajpayee's son in law) was heard telling Nira
that Mukesh Ambani told him "Congress to ab apni dukaan hai)."
Jaipal Reddy was removed as petroleum minister for refusing a proposal
of Mukesh Ambani-led Reliance Industries to hike the charges of the gas
it was supplying to state-owned power plants, Kejriwal said, demanding
that the Krishna Godavri Basin allotted to the company be cancelled.
"Mukesh Ambani is running the country it seems... Jaipal Reddy was
removed as he refused to hike the charges being levied by Reliance
Industries to supply gas to NTPC," Kejriwal said at a press conference.
He said the government looked helpless before the corporate group.
According to Kejriwal, the KG basin was awarded to Reliance in 2000 by
the NDA government when the corporate agreed to supply gas to the
National Thermal Power Corp for the next 17 years at $2.5 per unit. But,
said Kejriwal, the company revised the rate to $4.25 per unit in 2007
which then finance minister Pranab Mukherjee agreed to as the head of an
empowered group of ministers.
Later, he said, the company wanted the rate to be further hiked to
$14.25 per unit. Jaipal Reddy, who reportedly did not agree to the
proposal, was shunted out in Sunday's cabinet rejig, said the activist.
"The company was allowed to hike the cost of producing gas and thus its
profits," said Kejriwal. Reliance Industries was not immediately
available for comment.
Text of IAC's press release:
Kya Congress Mukesh Ambani ki dukaan hai?(All documents mentioned in this note are available on our site
www.indiaagainstcorruption.org )
In 2006, Mani Shankar Iyer was removed and Murli Deora brought in to
increase RIL capex from $2.39 billion to $8.8 billion and to increase
gas price from $2.34 per mmBTU to $ 4.2 per mmBTU.
In 2012, Jaipal Reddy has been removed and Moily brought in to increase
gas prices from $ 4.2 per mmBTU to $ 14.2 mmBTU and to condone RIL's
blackmailing of reducing gas production.
Huge benefits given to RIL in last one decade despite flagrant
violations of various agreements by RIL. Benefits to RIL causing serious
price rise in the country.
Both BJP and Congress involved. BJP signed a sweet deal with RIL in 2000. Congress faithfully implemented it.
If RIL demand of increasing the gas price to $ 14.2 is accepted, it
would lead to shut down of several gas based power plants and increase
in power and fertilizer prices. It would result in Rs 43,000 crores of
additional benefits to RIL.
In the Nira Radia tapes, Ranjan Bhattacharya (Vajpayee's son in law) is
heard telling Nira that Mukesh Ambani told him “Congress to ab apni
dukaan hai.” Facts below show that both Congress and BJP are in his
pocket.
Reliance Industries Ltd (RIL) has the contract to extract oil from KG
Basin. Under an agreement of 2009 with the government, they are supposed
to sell gas at $ 4.2 per mmBTU upto 31st March 2014. Midway now, RIL is
demanding that the price be increased to $ 14.2 per mmBTU. Jaipal Reddy
resisted that and he was thrown out.
Jaipal Reddy had prepared a note for EGOM, in which he mentioned that
acceptance of RIL's demand would mean an additional profit of Rs43,000
crores ($8.5 billion) to RIL(in 2 years) at current levels of low
production. Most of this gas is used in fertilizer and power production.
Increasing gas price would mean an additional financial burden of Rs
53,000Crores ($ 10.5 billion) on central and state government (copy of
relevant page of EGOM note is attached as annexure 1).
This would in turn mean higher electricity and fertilizer prices in the country or a higher subsidy burden.
In order to pressurize the government, RIL substantially reduced its
production of natural gas. Total consumption of natural gas in the
country is 156 mmscmd. According to agreement, RIL was supposed to
produce 80mmscmd (more than 50% of the total demand) from 2009. However,
they are producing just 27 mmscmd, almost a third of their commitment.
Production has been artificially kept low to blackmail the government.
They are not just hoarding the gas, but also forcing various consumers
to buy gas from abroad. Gas from abroad costs around $ 13 per mmBTU.
RIL's stand is simple “hum to gas $14.2 par hi denge, lena hai to lo,
nahin to jao.” Who does this gas belong to? According to Supreme Court
of India and the Indian Constitution, this gas belongs to the people of
India. Complete surrender of UPA before RIL indicates UPA's inability to
run governance in accordance with the Constitution.
Drastic reduction in production has forced many gas based power plants
in the country to shut down or run at much lower capacity. According to
media reports, almost 9000 MW of gas based power plants are lying idle.
Today, power from gas based power plant costs around Rs 3 per KWH. If
gas price is increased from $ 4.2 to $ 14.2 as demanded by Reliance,
power rates would go upto Rs 7 per KWH. That's too expensive. At that
cost, most of these plants would have to permanently shut down.
This is not the first time that a union minister has been eased out at
Mukesh Ambani's insistence. In 2006, when RIL had to get its capex
increased from $ 2.39 billion dollars to $ 8.8 billion dollars, Mani
Shankar Iyer was removed and a more Reliance friendly MurliDeora was
brought in.
Brief history:
RIL got this contract during NDA regime in the year 2000. The contract
was meant to favor RIL right from the beginning. In any business,
increase in costs means decrease in profits. However, the NDA government
, signed a contract dictated by RIL wherein an increase in cost by one
rupee meant additional profits of RIL by almost Rs 2.2. Isn't it
strange? A parameter called
Investment Multiple has been defined in the contract as under:
Investment Multiple (IM) = Total Revenue / Total Investment
According to the contract, till IM is below 1.5, RIL takes away more
than 80% of profits and government gets less than 20 per cent of
profits. It is only when IM becomes more than 2.5 that government gets
85 per cent. This means, RIL has a huge incentive to keep IM below 1.5
by increasing the expenditure artificially. Thus if Reliance were to
increase expenditure from 1 Billion to 2 Billion on a revenue of 5
billion, their own net income would go up from 1.6 Billion to 3.5
Billion. This is what the CAG has stated in para 8.1 of its performance
Audit of Hydrocarbon PSCs. (extract from executive summary of CAG as
annexure 2)
In 2004, RIL submitted an Initial Development Plan (IDP) saying they
would produce 40 mmscmd for an investment of $ 2.39 billion. All this
happened when Ram Naik was the petroleum minister in Vajpayee regime.
Within
2 years, RIL submitted another plan saying they would produce 80 mmscmd
for an increased investment of $ 8.8 billion. Doesn't that sound
strange? To double production, you increase your investment by four
times? Having put the initial infrastructure in place, it should have
cost lesser to create additional production capacity.
Mani Shankar Iyer, who was the then Petroleum minister, would not have
allowed this. So, Mani was shunted out of petroleum ministry and Murli
Deora, famous to be Reliance man, was brought in January 2006. Despite
strong protests by some MPs like Tapan Sen, Deora approved $ 8.8 billion
expenditure. By allowing $ 8.8 billion expenditure, in effect, Deora
allowed a future revenue of over Rs 1 lakh crores ($ 20 billion dollars)
for RIL.
CAG has remarked that there is strong evidence that RIL is
gold
plating its capital expenditure. Expenditure has been artificially
increased (for reasons mentioned above). For instance, RIL is required
to place orders for its plant, machinery and other requirements through
international competitive bids. CAG alleges that bids were arbitrarily
rejected to favor some parties. Just one company namely Aker group got
many contracts (see annexure 3, which is an extract from CAG report). Is
this group related to RIL? Is RIL siphoning off money through this
method?
RIL's pressure tactics:
RIL signed a contract with NTPC in 2004 to supply gas for its power
plants at USD 2.34 per mmBTU for 17 years. It signed a similar contract
with RNRL to supply gas at USD 2.34 per mmBTU. However, RIL went back
on its word. Under RIL's pressure, EGOM headed by Sh Pranab Mukherjee,
revised gas price in September 2007 to USD 4.2 per mmBTU. NTPC and RNRL
were forced to accept gas from RIL at revised price. By doing this,
Pranab Mukherjee headed EGOM gave an undue benefit of Rs8000 crores to
RIL
What is RIL's actual cost of production?
Cost of production is much less than USD 2.34 per mmBTU. (Copy of
extracts from an SC order Annexure 4).RIL had actually signed long term
agreements with NTPC and RNRL for supplying gas at that rate for 17
years. This means that at USd 2.34 per mmBTU also, RIL was making
adequate profits. India is getting gas at $ 0.9 per mmBTU from Oman. Gas
rates in Canada are at USD 1.74 per mmBTU. This means that at USD 2.34
per mmBTU also, RIL was making huge profits.
RIL sold out nation's resources:
Ownership rights of this gas belong to the people of India. RIL is just a
contractor hired by GOI to extract gas. Strangely, RIL sold 30% stake
in 21 of 29 oil blocks to British Petroleum in July 2011 at $ 7.2
billion. Government gave approval to RIL to do that. How can they do
that? It is almost like I hire a driver to drive my car and that driver
sells off my car after a few days.
Performance of RIL so far has been much worse than perhaps the worst performing government department.
1. 4 times cost escalation within 2 years from $ 2.39 billion in 2004 to $ 8.8 billion in 2006.
2. Increase in gas price from USD 2.34 per mmBTU in 2004 to $ 4.2 per mmBTU in 2007 to the present demand of $ 14.2 per mmBTU.
3. Capacity created for producing 80 mmscmd after incurring such a huge cost ends up producing just 27 mmscmd after 12 years.
4. 31 oil wells should have been in production till now. Out of them, just 13 are functional.
Has any government department fared as badly? If this had happened in
any government department, it would have been ripped apart by all
government agencies and media.
RIL scam akin to coal scam:
This scam is on similar lines as Coal block allocation scam. Coal blocks
were given away saying that coal production was less in the country and
private sector participation would increase coal production. Rather
than produce coal, the private parties hoarded coal blocks to sell them
at appropriate time in future.
In this case also, oil blocks were given away to RIL on the excuse that
oil and gas production in the country was less and private sector
participation would bring “efficiency”. Rather than the production going
up, RIL is hoarding the gas.
Role of PM:
RIL's request for increase in gas prices was turned down by Ministry of
Petroleum under Jaipal Reddy and EGOM several times in the last 2 years.
EGOM had fixed $ 4.2 per mmBTU price for RIL upto 31.3.2014. When
Jaipal Reddy did not budge, RIL approached the PM. PM was very
sympathetic to RIL. PM requested Ministry of Petroleum to seek AG's
opinion on whether gas prices could be increased midway as demanded by
Reliance.
It is strange why did the PM not show similar concern when NTPC was
forced to accept higher gas price from RIL? Why is the PM not pulling up
Reliance for not producing 80 mmscmd gas as per their commitment? Why
did the PM not seek legal opinion when country's interests were at
stake? Why is PM showing so much interest when RIL interests are at
stake?
Notice to RIL by Jaipal Reddy:
When RIL failed to meet its production targets, Jaipal Reddy decided to
disallow their capital expenditure. In the first instance, a notice for
disallowance of USD 1 billion expenditure was sent to RIL (Annex 5).
This would mean a loss of USD 2.2 (11,000 Crores) billion to RIL, if we
consider IM ratio. Next year, this disallowance could be USD 1.5
billion, which would mean a loss of USD 3.3 billion (16,500 Crores) for
RIL.
That is the reason why Mukesh Ambani got restless. And that is the reason why Jaipal Reddy was transferred out.
Real reasons for price rise in the country:
This episode explains the real reasons for price rise in the country.
The government seems to be succumbing to illegitimate demands of some
powerful corporates in the country (like RIL in this case). Benefits
provided to RIL in this case contributed to price rise in power and
fertilizer sectors. Similarly, on one hand, government says that they do
not have Rs 35,000 crores to provide LPG subsidy to the people, on the
other hand, the government bends backwards to provide benefits to these
corporate.
Questions:
1. Who is running the government? It appears that telecom companies
select their own nominee as Telecom minister and RIL selects its own
person as Petroleum minister.
2. So, is this government being run by powerful corporates?
3. Is Dr Manmohan Singh succumbing to corporates under some compulsions or out of ignorance? What are the compulsions, if any?
We demand:
RIL blackmailing should be immediately stopped. Their KG Basin contract
should be cancelled. Government should immediately put in place adequate
systems to get full production from KG Basin at cheapest prices for the
country.
ప్రపంచానికే ఎన్నికలన్నంత జోరుగా సాగుతున్న అమెరికా అధ్యక్ష ఎన్నికల
ప్రక్రియ తుది ఘట్టానికి చేరింది. రానున్న నాలుగేళ్లలో దేశానికి
నాయకత్వాన్ని అందించాల్సిన నేత ఎవరో ప్రజలు తీర్పు చెప్పనున్నారు. ఏడాదిగా
ఈ ఎన్నికల సమరంలో తలమునకలవుతున్న డెమోక్రటిక్, రిపబ్లికన్ పార్టీల
అభ్యర్థుల్లో గెలుపు ఎవరిని వరిస్తుందో చెప్పలేని పరిస్థితి నెలకొని ఉంది.
దేశంలోని 50 రాష్ట్రాలలో దాదాపు 40 రాష్ట్రాలు సంప్రదాయకంగా డెమోక్రాట్లకో,
రిపబ్లికన్లకో మద్దతు తెలిపేవే. కాబట్టి పోటీ నిజంగా జరిగేది ఆ మిగతా
రాష్ట్రాలలోనే. ఈసారి అలాంటి 11 రాష్ట్రాలు జయాపజయాలను తేల్చనున్నాయి. 
2000 సంవత్సరం లో జార్జి డబ్ల్యూ బుష్ తన డెమోక్రటిక్ ప్రత్యర్థి అల్‌గోరే
కంటే 5,43,895 తక్కువ ఓట్లు సాధించి కూడా విజయం సాధించగలిగారు. అలా
మెజారిటీ ఓట్లు సాధించకుండానే అధ్యక్షునిగా ఎన్నికయ్యే పరిస్థితి
ఉత్పన్నమైనప్పుడల్లా అమెరికా అధ్యక్ష ఎన్నికల పద్ధతిపై విమర్శలు
వెల్లువెత్తుతుండటం పరిపాటి. అదే ఇప్పడూ జరుగుతోంది. మరోవంక ప్రపంచానికే
తలమానికంగా ఎంచే అక్కడి ఫెడరల్ వ్యవస్థ రాష్ట్రాల గవర్నర్లకు కట్టబెడుతున్న
నిరపేక్ష అధికారాలు కూడా చర్చనీయాంశంగా మారాయి. 
నిబంధనల
వల్ల ఒహాయోతోపాటూ ఫ్లోరిడాలో కూడా భారీగా ఓట్లు చెల్లకుండా పోయే పరిస్థితి
కనిపిస్తోంది. రిపబ్లికన్ గవర్నర్ల ఈ ఎన్నికల క్రీడ ఫలితంగా... ఓటింగ్‌లో
పుంజుకుంటారని భావిస్తున్న ఒబామా ఓటమిని ఎదుర్కోవాల్సిన పరిస్థితి ఉంది.
ఏదిఏమైనా ఈ ఎన్నికలు అమెరికా అధ్యక్ష ప్రజాస్వామ్య వ్యవస్థపై పలు చర్చలను
లేవనెత్తుతున్నాయి. 
The key accusations: