CAG asks oil ministry not to approve RIL investment plan for KG-D6

CAG advised any increase in capex may have an adverse impact on govt’s financial interests
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First Published: Fri, Nov 16 2012. 07 47 PM IST
A file photo of Reliance Industries Ltd’s KG-D6 basin.
A file photo of Reliance Industries Ltd’s KG-D6 basin.
Updated: Fri, Nov 16 2012. 11 33 PM IST
New Delhi: The Comptroller and Auditor General (CAG) of India has asked oil ministry not to approve any of Reliance Industries Ltd’s (RIL) investment plans for the flagging KG-D6 gas field unless the company gives it unfettered access to audit its spendings.
In a strongly worded letter, CAG referred to media reports about the ministry giving nod to RIL’s annual capex for KG-D6 that have been pending for past three years, to advise the ministry not to approve any investment except those of “emergent nature”.
“It is well within the knowledge of the ministry that any increase in capital expenditure is likely to have significant adverse impact on government’s financial interests,” CAG wrote to oil secretary on 9 November.
Sources, however, said contrary to reports, the ministry is yet to sign on resolutions approving capital expenditure on the KG-D6 block for 2010-11, 2011-12 and 2012-13 fiscal pending resolution of CAG audit of spending on the block. The ministry wants RIL to give CAG “unfettered access to account books” and pending that it has not approved the firm’s investment proposals including annual budget for three years.
“We would like to strongly recommend that pending complete submission of all supporting records by the operator relating to expenditure for previous years upto 2011-12 and comprehensive and detailed scrutiny thereof to verify that the government’s financial interests have not been adversely affected in any, the ministry may examine all relevant issues closely and carefully before considering the desirability of any future approvals of capital expenditure through the annual work programme and budget, development plans or otherwise, except those of an emergent nature,” CAG wrote.
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First Published: Fri, Nov 16 2012. 07 47 PM IST
More Topics: Reliance Industries | RIL | CAG | KG-D6 | Oil Ministry |
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