Reliance Industries Ltd (RIL) has reiterated that NTPC was aware that the gas price (of $2.34/mBtu) quoted by it in the international competitive bid was subject to Government approval.
Clarifying the company’s position to the Power Secretary, Mr H.S. Brahma, Mr P.M.S. Prasad, Executive Director, RIL, said, “We reiterate that we had pointed out the need for approval of the price by the Government under the production-sharing contract (PSC), as one of the conditions precedent for the contract to become effective.”
In a letter written to the Power Secretary on September 4, Mr Prasad said, “NTPC advised RIL to submit an unconditional bid with an assurance that the revised gas sales and purchase agreement (GSPA) would provide a blank schedule listing the approvals required by the sellers, and such schedule can be filled up by mutual agreement at the time of signing of the GSPA.”
“The GSPA, as finalised by NTPC on March 15, 2004, on the basis of which all bidders submitted their financial bids during bidding process, specifically stipulated that all the bids were conditional upon all approvals that NTPC and the bidder may need. The draft GSPA issued on March 15, 2004, by NTPC, contained the clause…. Thus, there was obviously no need for RIL to specifically state that its price was subject to approval of the Government,” he said in the letter.
Mr Prasad added that if NTPC was of the view that this condition made RIL’s bid conditional, then NTPC would have objected to it, which it had not done till date.
“On the contrary, NTPC satisfied itself that the provisions of the PSC were such that RIL would require approval of the price from the Government of India, if the GSPA was to function as anticipated. On being satisfied, NTPC, not only agreed that the approval of the Government to the price as condition precedent but also insisted on it being included in the GSPA, which they wanted RIL to execute,” he said.
In the suit filed by NTPC before the Bombay High Court, NTPC has sought a direction from the court that RIL should sign the May 9, 2005, draft of the GSPA, which contained the requirement of Government approval to the sale price as a condition precedent to the contract becoming effective, Mr Prasad said.
New conditionality
“If NTPC felt that RIL was imposing some new conditionality to the bid in the form of Government approval of the price to wriggle out of the alleged concluded contract, it would have challenged in the proceedings. Any suggestion, to the contrary coming from NTPC, at this stage, is clearly an after thought and for some inexplicable reason
Source: HBL
_____________________________________________________________________________________
Clarifying the company’s position to the Power Secretary, Mr H.S. Brahma, Mr P.M.S. Prasad, Executive Director, RIL, said, “We reiterate that we had pointed out the need for approval of the price by the Government under the production-sharing contract (PSC), as one of the conditions precedent for the contract to become effective.”
In a letter written to the Power Secretary on September 4, Mr Prasad said, “NTPC advised RIL to submit an unconditional bid with an assurance that the revised gas sales and purchase agreement (GSPA) would provide a blank schedule listing the approvals required by the sellers, and such schedule can be filled up by mutual agreement at the time of signing of the GSPA.”
“The GSPA, as finalised by NTPC on March 15, 2004, on the basis of which all bidders submitted their financial bids during bidding process, specifically stipulated that all the bids were conditional upon all approvals that NTPC and the bidder may need. The draft GSPA issued on March 15, 2004, by NTPC, contained the clause…. Thus, there was obviously no need for RIL to specifically state that its price was subject to approval of the Government,” he said in the letter.
Mr Prasad added that if NTPC was of the view that this condition made RIL’s bid conditional, then NTPC would have objected to it, which it had not done till date.
“On the contrary, NTPC satisfied itself that the provisions of the PSC were such that RIL would require approval of the price from the Government of India, if the GSPA was to function as anticipated. On being satisfied, NTPC, not only agreed that the approval of the Government to the price as condition precedent but also insisted on it being included in the GSPA, which they wanted RIL to execute,” he said.
In the suit filed by NTPC before the Bombay High Court, NTPC has sought a direction from the court that RIL should sign the May 9, 2005, draft of the GSPA, which contained the requirement of Government approval to the sale price as a condition precedent to the contract becoming effective, Mr Prasad said.
New conditionality
“If NTPC felt that RIL was imposing some new conditionality to the bid in the form of Government approval of the price to wriggle out of the alleged concluded contract, it would have challenged in the proceedings. Any suggestion, to the contrary coming from NTPC, at this stage, is clearly an after thought and for some inexplicable reason
Source: HBL
_____________________________________________________________________________________
Posts
No comments:
Post a Comment