Pvt power firms concerned at RNRL getting gas at lower rates

Pvt power firms concerned at RNRL getting gas at lower rates
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First Published: Sun, Jul 19 2009. 05 23 PM IST
Updated: Sun, Jul 19 2009. 05 23 PM IST
New Delhi: After fertiliser firms, private power companies have voiced concerns over gas supplies from Reliance Industries’ KG-D6 fields being impacted if the fuel is diverted to an Anil Ambani Group firm at lower rates.
GMR Group, Torrent Power and GVK Industries have written separately to petroleum minister Murli Deora and power secretary HS Brahma, stating that the move would give unfair price advantage to ADAG and kill competition in the power sector.
The Bombay high court had last month directed Mukesh Ambani-run RIL to sell 28 million standard cubic metres of gas per day (almost the same volume currently produced from KG-D6) to Anil Ambani-run RNRL at $2.34 per mmBtu, which is 44% lower than the rate set by the government.
Subsequent to this order, RNRL moved the Supreme Court, seeking to restrain RIL from selling gas to any other company other than itself.
“The price indicated in the order would benefit specific power generators (like those of Anil Ambani Group) 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 GV Sanjay Reddy said, “(The judgement) is in favour of one particular group which has been given inexplicable advantage to load the electricity market against all competition.”
“The benefit of differential price being passed selectively to a particular group will give rise to the worst kind of biased market condition to the detriment of the development of the power sector and the economy of the country in general,” it wrote.
Hyderabad-based GMR Group said it could begin electricity generation from the 388 MW Vemagiri power plant, built in September 2006, only in April upon the arrival of KG-D6 gas.
“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 BVN Rao, business chairman - energy, GMR Group.
Earlier, Andhra Pradesh chief minister YS Rajasekhara Reddy had written to Prime Minister Manmohan Singh saying that valuable resources like natural gas “cannot be allowed to be monopolised by a few private developers”.
“All gas supply contracts, be it the family contract or the gas sale purchase agreement (GSPA) with the power plants, should become subordinate to the decisions of the Empowered Group of Ministers (that allocated the first 40 mmscmd gas between fertiliser and existing power plants) and not otherwise,” he wrote.
“We cannot allow the decision-making in regard to such an important resource to fall in the private monopolistic domain,” he said in the letter.
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First Published: Sun, Jul 19 2009. 05 23 PM IST
More Topics: Ril | Powercos | Gas dispute | RNRL | GVK Industries |