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NTPC gets ministry approval to intervene

NTPC gets ministry approval to intervene
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First Published: Fri, Jul 31 2009. 11 43 PM IST

Awaiting feedback: NTPC’s R.S. Sharma says the firm has sought the attorney general’s opinion on the government’s petition in the case.
Awaiting feedback: NTPC’s R.S. Sharma says the firm has sought the attorney general’s opinion on the government’s petition in the case.
Updated: Fri, Jul 31 2009. 11 43 PM IST
New Delhi: The Union power ministry has given the go-ahead to state-owned power utility NTPC Ltd to intervene in the gas dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL) pending before the Supreme Court (SC).
Awaiting feedback: NTPC’s R.S. Sharma says the firm has sought the attorney general’s opinion on the government’s petition in the case.
It could further complicate the case, especially if NTPC does follow through and its intervention contradicts the government petition filed by the petroleum and natural gas ministry in the apex court on 18 July, demanding scrapping a private gas supply agreement between Mukesh Ambani, who controls RIL, and brother Anil Ambani, who heads RNRL.
“NTPC can intervene in the Supreme Court in the RIL-RNRL case to safeguard its interests. It is up to them to decide a course of action,” said Hari Shankar Brahma, Union power secretary.
NTPC has already sought legal opinion from India’s attorney general on the government’s petition in the case. Based on the feedback, it may intervene in the case between the firms promoted by the estranged Ambani brothers, as reported by Mint on 22 July.
“We are awaiting the attorney general’s opinion,” said R.S. Sharma, chairman and managing director of NTPC.
Questions emailed to the external spokesperson of RIL remained unanswered at the time of writing this story, while the Reliance-Anil Dhirubhai Ambani Group, which controls RNRL, declined comment.
In June, the Bombay high court ruled in favour of RNRL in a case involving the supply of 28 million standard cu. m a day (mscmd) of gas from the Krishna-Godavari basin’s D6 block to Dadri for 17 years at a price of $2.34 (around Rs113) per million British thermal unit (mBtu). Both RIL and RNRL then appealed the case in SC—RNRL asking for immediate execution of its agreement and RIL asking for the setting aside of the high court’s order. SC has set 1 September as the date for the next hearing.
The power ministry’s go- ahead comes at a point when Anil Ambani has criticized the petroleum ministry’s role in the gas dispute and termed its intervention in the dispute, “unnecessary”, “partisan and biased”.
The petroleum ministry’s petition referred to a memorandum of understanding (MoU) signed between the Ambanis at the time they divided the Reliance Group’s assets between themselves, and which outlines the supply of 28 mscmd of gas from RIL’s D6 block to Reliance Power Ltd’s Dadri power plant.
NTPC has reason to be concerned by the petroleum ministry’s petition because its 12 mscmd supply is also mentioned in the same MoU signed between the two brothers.
“If NTPC wants to intervene, they can. Everyone has a right to give his opinion,” said a top petroleum ministry official, who did not want to be identified since the case is sub judice.
The case between NTPC and RIL in the high court dates to December 2005 over the supply of gas about whether “there is a valid and concluded contract with RIL”. RIL had secured the bid to supply 12 mscmd of gas for the expansion of NTPC’s Kawas and Gandhar plants for 17 years at a price of $2.34 per mBtu in 2004 and had beaten Petronas-Petronet, which had quoted $4.23 per mBtu. Shell and Yemen LNG were among the other losing bidders.
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First Published: Fri, Jul 31 2009. 11 43 PM IST