Deora meets law minister, Pranab on Anils outburst

THE Congress battery of official spokespersons declined to comment on the record. However, two senior Congress leaders, one a two-term chief minister of a large North Indian state and the other a member of the Union Cabinet said that the party may have to take a stand because the allegations of favouritism against a senior cabinet minister could hurt the image of the party and the government. Both declined to discuss specifics or to spell out what that stand could be. Some political observers feel that another empowered group of ministers (EGOM) may have to be set up to resolve the dispute. Mr Deora is believed to be opposed to this. On Tuesday evening, Mr Deora met law minister Veerappa Moily and finance minister Pranab Mukherjee to discuss the days developments . The outcome of the meeting isnt clear though a source said the ministers had decided to support the petroleum ministrys move to file a special leave petition (SLP) in the Supreme Court seeking scrapping of those parts of the family settlement pertaining to the supply of gas.  In the speech, Mr Ambani referred several times to his father claiming that RIL was deviating from the founders philosophy. In refusing to execute a bonafide commercial agreement RIL has no regard for... morality in its headlong pursuit of corporate greed, he claimed.  In the AGM speech, while extensively updating shareholders of Reliance Natural Resources (RNRL) on recent developments of its four-year-old gas dispute with RIL, Mr Ambani said the petroleum ministrys stand was aimed at helping RIL renege on its contractual commitments with RNRL as well as stateowned NTPC.  Mr Ambani lashed out at the petroleum minister Mr Deora in no uncertain terms. I am sure all private companies in India wish that if they made commercial decisions they wished to get out of, they too had a saviour to bail them out as is the case for RIL.  He said that he had written a letter on this subject to Prime Minister Manmohan Singh. He was confident that Dr Singh would support the cause of truth and justice , and ensure neutrality of the government in a pure commercial dispute between two corporate entities . Despite the directness of his speech, Mr Ambani was careful to confine his attacks to Mr Deora.  The legal dispute between RIL and RNRL is now being fought at the Supreme Court, following a Bombay High Court order in June which ordered RIL to sell gas from its Krishna Godavari basin to RNRL for $2.34 per mmBtu for 17 years. This was lower than the government set price of $4.20 per mmBtu. The petroleum ministry had also joined the case in the apex court by filing a special leave petition (SLP) seeking annulment of the gas supply contract between RIL and RNRL. The Supreme Court will hear the case next on September 1. The SLP and crossappeals filed by both sides will come up for admission before the Supreme Court.  The facts are deliberately being twisted by the oil ministry to say the corporate agreement between RIL and RNRL is a private division of sovereign assets, Anil Ambani said, rejecting the contention that the gas price was set as part of a private agreement between the brothers in 2005.  He also criticised the petroleum ministrys stand that RIL had violated the product sharing contract (PSC) with the government by promising gas to RNRL without informing the government. Frankly, if the petroleum ministry is genuinely aggrieved... why dont they exercise their powers and terminate the PSC and take back the ownership of the gas fields from RIL when the provisions exist for them to do so he asked.  He said the ministrys claim that it was not aware of the agreement between the Ambani brothers was untrue. He said the ministry had been in possession of all relevant details of the gas deal since April 2006 when RIL provided details of the gas pact to the ministry.  He also attacked the petroleum ministry for its claims that the sale price of the KG basin gas was fixed at $4.20 per mmBtu. Drawing a parallel to stamp duty on property, which acts as a reference rate and has no bearing on the actual transaction price, he said $4.20 per mmBtu was fixed for the calculation of the governments share of profit from the gas sale.  Also, he emphasised that the government would not lose money if RIL sells gas at a lower price of $2.34 per mmBtu, as directed by the Bombay High Court in June. Under the PSC, 99% of all revenues and profits would go to RIL and the remaining 1% to the government in the initial years. Of the initial revenue of Rs 50,000 crore from the gas sale, RIL will get Rs 49,500 crore, he said. Makes you wonder why the petroleum ministry is pushing so hard for higher gas prices, when 99% gains will go to RIL, he said sarcastically.  According to him, NTPC is also affected by RILs machinations. NTPC has been fighting a separate legal tussle to obtain gas from RILs KG D-6 .  Giving details of the global gas scenario, he said the price of the industrial fuel had crashed 80% and the gas price of $4.2 per mmBtu (fixed by the government ) was exorbitant and against public interest. The ministrys role runs counter to the view of others in the government that it shouldnt play any role in price-setting , Mr Ambani said.  The petroleum ministry has unilaterally gone ahead and taken a stand, which runs contrary to that of the cabinet sub-group , apparently without even consulting it, even though that group represented the broader collective wisdom of several other ministers, including the ministers of finance, law, power and fertilisers, he said on Tuesday.  Anil Ambani said Reliance Industries is seeking an exit from its obligations. It is unfortunate that Reliance Industries has tried every trick in the book and apparently several outside the book to back out of its solemn, legal and contractual obligations, he said.