Govt told to settle gas row out of court

Informed sources said Solicitor General Gopal Subramanium has advised the government to “find a solution which should reflect one stand and no element of public interest should be jeopardised.”

The advice has been placed before the Prime Minister for approval and he has already seen it, sources said.

The recommendation comes in the wake of RIL being allowed to amend its plea before the Bombay High Court, where the private company used the government’s affidavit on gas pricing to buttress its argument on why it should not supply gas to NTPC at the bid price of US$2.34 per mmBtu.

Noting that this was a very serious matter, the source said RIL as a defendent in the NTPC’s suit before the High Court cannot use the government’s stand against a PSU.

Strong opinion
Also, RIL cannot be allowed to rely on the central government’s affidavit. Subramanium has given a very “strong opinion” on the matter that the government should not help anybody but NTPC, sources said.

“Government cannot destroy the case of NTPC or any other PSU,” Subramanium is believed to have opined.

The Solicitor General has suggested that the government should settle the issue, may be, out-of-court with all the parties concerned. According to the government counsel, there is a concluded contract between NTPC and RIL for supply of gas to NTPC’s Kawas and Jhanor projects for 17 years at USD 2.34 per mmBtu.

After RIL entered into a contract with NTPC following an international competitive bidding and was issued a Letter of Intent, it refused to sign an agreement on the grounds that the price needs to be approved by the government.