Centre: Don’t equate NTPC, RNRL

After showing much reluctance to file an affidavit in the ongoing RIL-RNRL gas row in the Supreme Court, the Central government has finally made its stand clear on Wednesday by putting the state-run NTPC on a higher pedestal than private sector companies.

“The rights and obligations of NTPC and RIL cannot be regarded as similar in status to the private arrangement as in the case of RIL and RNRL as NTPC is not only a PSU but the process involved for price determination in its case is (for supply of gas) is by the international competitive bidding,” the oil ministry in its affidavit stated.

The ministry submitted that the price offered by the contractor to NTPC “will require scrutiny and approval of the government under the production sharing contract (PSC).”

It further said that the government would take an appropriate decision in case of NTPC as and when the need would arise in future and such a decision would be based on public interest.

Even if the government’s decision was in favour of NTPC, it could not be termed as “discriminatory and arbitrary”, the ministry maintained in a bid to dispel any impression that it was giving preferential treatment to RIL vis-à-vis RNRL in the ongoing case between the companies of the Ambani brothers.

During the arguments in the case, the Supreme Court observed that if the gas was supplied at a higher price of $4.23 per unit by RIL, it would result in an increase in the power and fertiliser cost. “Yes, it will go up. It’s right,” said a Bench, headed by the Chief Justice, Mr K.G. Balakrishnan, when RNRL counsel, Mr Mukul Rohtagi, sought to explain the pricing mechanism.

“The government will be left to subsidise the prices of power and fertilisers,” Mr Rohtagi quipped, when he got a positive nod from the court to his argument on the possible increase of gas prices.

RNRL had sought the enforcement of agreed price of $2.34 per unit by RIL to supply gas to its proposed mega power plants.

Source: Deccan Chronical

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