CAG unable to access RIL books for auditing gas PSC

Last Updated: Saturday, August 8, 2009 - 15:12

New Delhi: India`s supreme audit institution CAG Saturday said it is in the process of auditing government`s gas contract with Mukesh Ambani-led RIL, but has not been able to access the books of the contractor for about two years.

"Audit has gone into a limbo, so we cannot share much
details," a top official at the Comptroller and Auditor
General said on the condition of anonymity, when asked if the
audit has been done on the capital expenditure of Rs 45,000
crore by RIL in its Krishna-Godavari basin gas fields.

"The CAG team has carried out the audit work," V K Sibal,
Director General, Directorate General of Hydrocarbons, had
said earlier this week.

The comments by the oil and gas regulator, on its
official website, followed allegations made by Anil Ambani,
fighting a bitter gas battle with elder brother Mukesh, that
RIL had overstated its expenditure and demands for a probe by
the Central Vigilance Commission and audit by CAG.

The CAG official said the special audit was being done on
the government`s request under the New Exploration Licensing
Policy (NELP) for finding natural gas and other petroleum
products.

Auditing was being done not only of the Production
Sharing Contract between the government and RIL, but also for
at least half a dozen other contracts. But the account books
of these contractors were not accessible, he added.

Another official, who also did not want to be named, said
that CAG was trying to work out a solution to take forward the
audit that started about two years ago.

In his comments, Sibal had rejected Anil Ambani`s charges
that DGH had approved RIL`s Rs 45,000-crore "exorbitant
capital expenditure" plan for gas fields, saying the actual
expenditure was subject to three audits including one by CAG.

The Production Sharing Contract (PSC) provides for
auditing of the actual expenditure by three sets of auditors -
the management committee appointed auditors, government
appointed auditors and by the CAG.

RIL is investing USD 8.836 billion (about Rs 42,500
crore) in developing the Dhirubhai-1 and 3 gas finds in block
KG-D6 - first two of the 18 gas finds in the block.

"The idea of gold plating betrays a lack of knowledge of
business economics. Inflating the expenditure does not benefit
any stakeholder- neither the contractor nor the government. No
company would like to increase its investment unproductively.
Every additional dollar of wasteful investment dents the
profit of the contractor," Sibal had said without naming Anil.

Bureau Report



First Published: Saturday, August 8, 2009 - 15:12

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