‘Reliance violated govt contract terms’

DGH's U-Turn Allowed RIL To Keep Full BlockNew Delhi: The CAG has accused Mukesh Ambani-controlled Reliance Industries of violating the terms of its contract with the government by not relinquishing 25% of its Andhra offshore acreage after discovering oil and gas there. 

    The auditor has said the Director General of Hydrocarbons (DGH) appears to have gone along with this violation. In fact, after initially raising objections, the DGH made a Uturn and went along with Reliance's demand for retaining the entire exploration block. 
    RIL declined comment but said it was committed to following norms. 
    The CAG report has also raised questions about the way Reliance awarded procurement contracts for commissioning its project. It gave away as many as 10 contracts on single bids, points out the auditor, while wondering whether this did not inflate the project cost. 
    Normally, higher costs would be detrimental to the Centre since the company can recover spending from oil and gas revenue before sharing profit with the government. 
    The CAG's report on a special audit of Reliance's KG basin gas fields also suggests the oil ministry played along with the DGH's decision, which was not in line with provisions of the contract. 
GAS TROUBLE 
On Reliance 
Violated contract by not surrendering 25% of Andhra offshore acreage after making discovery in 2002 
Eliminated competition in contracts for goods and services 
Awarded contracts at unreasonable rates 
Directly notified discoveries without first giving details to govt & management committeeObjected to special audit 
On oil ministry 
Aware of flaws in decision to allow Reliance to retain full acreage, but chose to play along 
On DG of Hydrocarbons 
Made U-turn after disagreeing with Reliance's contention to retain entire acreage 
On Murli Deora 
Raised pertinent concerns on whether decision on acreage was in line with contract. Approved it after a panel under then addl secy cleared Reliance's claim