New Delhi: Anil Ambani group firm Reliance Natural Resources Ltd (RNRL) on Sunday hit out at power companies GMR and GVK for raising the bogey of unfair price advantage to it, saying that they had got into gas deals with Mukesh Ambani-led Reliance Industries Ltd (RIL) knowing that the agreement was subject to the outcome of the RNRL-RIL case.
Commenting on reports that GMR Group, Torrent Power and GVK Industries had approached the government complaining that unfair price advantage to the ADAG firm will kill competition, RNRL counsel Mahesh Agarwal said: “They are citing the RIL battle or in other words, RIL is using them to fight its own battle.”
RIL and RNRL have filed cross-appeals in the Supreme Court challenging the Bombay high court decision and the apex court will hear the case on Monday.
The power companies had voiced concerns that gas supply from RIL’s KG-D6 fields would be impacted if the fuel is to be diverted to RNRL at lower rates.
“GMR and GVK signed agreements with RIL based on the Bombay high court order and that provides that gas supply is subject to the outcome of the RNRL-RIL case,” Agarwal said.
He said that the petroleum ministry had suggested to the high court that pending the dispute, gas could be supplied to others and the same was accepted.
Terming the power companies’ stance ‘malafide’, Agarwal said that they had got into the gas supply deal with RIL knowing the high court decision and now they are crying.
He said that RNRL had got into an agreement with RIL to get the gas at $2.34 per mmBtu for 17 years at an arms-length agreement whereas power companies signed the deal for five years which was not at arms-length as the gas was for their stranded projects.
GMR Group, Torrent Power and GVK Industries have written separately to petroleum minister Murli Deora and power secretary H.S. Brahma, stating that the move would give unfair price advantage to ADAG and kill competition in the power sector.
“The price indicated in the order would benefit specific power generators and thereby making power generated by others non-competitive,” Torrent Power said, adding: “Such an environment would discourage further investment by multiple players in the power sector.”
GVK vice-chairman G.V. Sanjay Reddy said: “The judgment is in favour of one particular group which has been given inexplicable advantage to load the electricity market against all competition.”
“Such large quantities of gas supplied to a single entity will not leave scope for any other player in the field to sustain and survive,” said B.V.N. Rao, business chairman - energy, GMR Group.