Financial Daily from THE HINDU group of publications
Wednesday, Dec 21, 2005
Financial Daily from THE HINDU group of publications Wednesday, Dec 21, 2005 |
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Courts/Legal Issues Industry & Economy - Power Corporate - Corporate Disputes Gas supply contract issue — NTPC files case against Reliance Our Bureau
Mumbai , Dec. 20 NATIONAL Thermal Power Corporation on Tuesday moved the High Court of Bombay against Reliance Industries Ltd (RIL), putting into action a warning earlier this month that it would take "legal and other steps" against the company for not honouring the gas sale and purchase agreement (GSPA) between the two. NTPC has requested that the contract be executed by RIL in accordance with the bid conditions and that the latter be restrained from selling gas to any other customer in the interim. The case is likely to come up for hearing some time this week, said NTPC sources. According to NTPC, certain deviations sought by RIL in the gas supply agreement would hurt the progress of two of its 2,600-megawatts (MW) projects coming up in Gujarat. Earlier this month, the Union Power Minister had said that his Ministry was also trying to initiate "appropriate steps" for revising RIL's production-sharing contract. "NTPC is taking legal and other steps for enforcing the contract. The Power Ministry has written to the Petroleum and Natural Gas Ministry for initiating administrative measures for enforcing the contract," he had said. The deviations mainly relate to limitation of liability, gas supply obligation and development and production plans, he had said. "The changes sought by RIL will have adverse commercial impact on NTPC." Reliance had won a contract to supply 3 million tonnes of natural gas to NTPC. NTPC had signed a Letter of Intent with RIL in June 2004 for gas supplies to its Kawas and Gandhar expansion projects (1,300 MW each) following a bidding process, which included a GSPA.
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