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Rediff News  All News  » Business » KG gas: Making NTPC pay $4.2=scam, says Jethmalani

KG gas: Making NTPC pay $4.2=scam, says Jethmalani

January 19, 2009 18:31 IST

Anil Ambani Group company RNRL said in the Bombay high court on Monday that asking public sector power major NTPC to pay $4.2 instead of contracted price of $2.34 per unit of gas to RIL would tantamount to a mega scam.

"Due to the EoGM decision, NTPC will have to pay Rs 30,000 crore (Rs 300 billion) more to RIL," RNRL's lawyer Ram Jethmalani said, adding it is a scam many times bigger than Satyam.

RNRL and Mukesh Ambani's RIL are fighting a legal battle over the terms of gas supply agreement for Anil Ambani Group's gas-based Dadri power project.

Two weeks ago, government lawyer Mohan Parasaran had stated in the court that the Empowered Group of Ministers had decided that $4.2 per mmbtu would be the minimum price of KG basin gas.

This would apply to RIL's supply agreement with NTPC too, Parasaran had said.

But as per the NTPC-RIL agreement, the power major is due to get gas at $2.34. RNRL too is seeking to purchase gas at the same price.

Parasaran told the court that NTPC won't get gas for less than $4.2. But advocate general Ravi Kadam, who represents NTPC in its case against RIL, maintained that NTPC is entitled to get the gas at $2.34.

RNRL urged the court that in case it decided to vacate stay on sale of gas to third party, the first 12 mmscmd of gas should go to NTPC or any other PSU nominated by the government and not to any private buyer.

Both the RIL and the government want the stay lifted as gas production may start next month.

The division bench of Justices J N Patel and K K Tated adjourned the hearing till January 22.

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