WITH LOK SABHA ELECTIONS DUE IN LESS THAN TWO YEARS, IT IS ONLY
REASONABLE TO EXPECT AN EXPANSION OF POPULISM AT THE EXPENSE OF THE PRIVATE SECTOR.
regulator, has asked the ministry to disallow RIL from recovering Rs 6,000 crore out of its Rs 26,000 crore total cost in developing the KG- D6 basin because the output has fallen largely because RIL has only drilled 18 wells instead of the 31 it had committed to. According to the production- sharing contract signed by RIL and the Government, any dispute between the two parties must be resolved by an arbitration. Reliance has already appointed its arbitrator and counsel. The Government has stalled.
On April 18, Reliance filed a petition in Supreme Court asking it to direct the Government to appoint an arbitrator. The Government may well have a case against Reliance— Mukesh Ambani believes it doesn’t— but it cannot avoid following due process signed into contract. Investment in the oil and gas sector, barring BP’S $ 7 billion ( Rs 3,500 crore) investment in Reliance in 2011, has been negligible in recent years. A protracted dispute over KG- D6 will not help.
It is, of course, remarkable to see the well- connected Mukesh Ambani being harassed by the Government, unable even to persuade Government to follow due process. If that is the fate of Mukesh Ambani, India Inc ought to be very scared.