CAG asked to quantify losses in KG Basin

Vinod Rai says govt incurred losses in the production sharing contract with RIL

PTI | April 17, 2012



Congress and Left members today demanded in the Parliament's Public Accounts Committee meeting that CAG should quantify the exact loss incurred by the government till now in the Reliance India Limited-run KG Basin project.

In the PAC meeting today, Saifuddin Soz (Cong) and Prasanta Chatterjee (CPI-M) asked the CAG to come up with the quantum of loss incurred by the government in the KG Basin project till present, sources said.

They insisted that since CAG has analysed losses only upto 2008 in his report the real picture is not clear.

CAG Vinod Rai made a presentation on his report on the KG Basin project and pointed out that government had incurred losses in the Production Sharing Contract (PSC) with Mukesh Ambani-led RIL.

He insisted that since this was the first Public Private Partnership (PPP) project being assessed by CAG, the losses could not be quantified as the criteria to be applied in such a project was different. CAG mainly deals with financial aspects of contracts and projects handled wholly by the PSUs and the government.

Rai told the PAC that if it wants the losses incurred till the present date to be presented, the CAG can do so in the near future.

The Petroleum Ministry has maintained that though there were "lapses" which led to loss in the KG Basin project, the job of quantifying the loss lies with the CAG.

It has reasoned that funds approved by managing committee for the KG Basin project saw a cost escalation due to some changes later. However, the contractor had already begun the procurement process which led to losses.

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