Companies

PAC rejects Reliance’s criticism of CAG’s audit process of KG Basin Block

AM JIGEESH New Delhi | Updated on January 24, 2018 Published on June 21, 2015

War of words: A source has said that Reliance was given enoughopportunities to present its views at various stages during the audit

Accounts panel says company given enough chances to present its views

The Public Accounts Committee (PAC) has “rejected” Reliance Industries Limited’s claim that the Comptroller and Auditor General (CAG) did not give it a chance to express its reservations on the auditing process of the production sharing contract for its Krishna-Godavari Basin block.

On CAG expertise

A source in the panel told BusinessLine that RIL was given enough opportunities to present its views at various stages during the audit.

“We have also rejected their claims that the CAG does not have the expertise. CAG has been auditing ONGC’s contracts for years,” he said. The panel, however, is learnt to have advised the CAG to take utmost care to avoid such accusations from the private contractors.

It is waiting for a final presentation on the quantification of actual losses to the exchequer due to alleged advantage taken by the contractors.

“After the CAG’s presentation, we may give a chance to both the Petroleum Ministry and RIL to present their views on the figures,” he added.

Revision of price

The panel is considering two reports on the production sharing contracts — the RIL-operated KG Basin Block and contracts of other players — simultaneously and is likely to submit a report in the upcoming monsoon session of Parliament.

The PAC is also likely to look into how the empowered group of ministers (EGoM) arrived at a price of $4.2 per mmBtu for the gas produced from these reserves.

“This is a policy issue. The CAG is not supposed look at it, but the PAC can. We will find out how the EGoM arrived at this price, which was in line with the contractor’s suggestion,” the member added.

Policy changes sought

The New Exploration and Licensing Policy (NELP) is also being criticised by the panel. The NELP, formulated during the United Front regime in 1997 and implemented during the NDA regime in 1999, is not transparent, felt most of the MPs in the panel.

“We want a transparent policy as the area of private participation in exploration of resources is new,” the member added.

Published on June 21, 2015
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