Millennium Post

Govt apathy bled exchequer of Rs 28,000 crore, says CAG

In a startling revelation, the Comptroller and Auditor General (CAG) in its audit report has blamed the government for a loss of over Rs 28,000 crore to the exchequer by delaying awarding contract to successful private bidders of Ratna and R-Series (R&RS) oil and gas fields.

The official auditor in its report, which was tabled in both the Houses of Parliament on Friday, mentioned that the issue of awarding the production sharing contract (PSC) to consortium of successful bidders (CoSB) remained unsettled even after 23 years of policy decision, 19 years of award and 16 years of approval.

The CAG report said: “The 16-year delay in awarding oil and gas fields to successful bidders deferred production of hydrocarbons to the tune over Rs 26,000 crore and Rs 1,086 crore damage to unused facilities in the Arabian Sea.”

The R&RS fields off the Mumbai coast have been languishing since 1993 when the PV Narasimha Rao-led Congress government decided to invite private players for the oil and gas exploration.

The fields were awarded to a consortium-led by Essar Oil in 1996, when DMK leader TR Baalu was the Minister of State for Petroleum in the Cabinet of the then Prime Minister HD Deve Gowda.

In 1999, when Atal Bihari Vajpayee was the Prime Minister and Ram Naik was the Petroleum Minister, the Cabinet Committee on Economic Affairs (CCEA) had approved finalising and concluding PSC within six months after negotiations were held by Negotiating Team of Secretaries (NTS). The NTS had held 20 meetings between November 1999 and June 2013, but it didn’t adhere to its own targets.

According to sources, the interest of the then government to “include” Mukesh Ambani-owned Reliance in the deal delayed the signing of contract and it has not been signed till date over the issue of royalty to be charged from Essar Oil.

The CAG said: “Domestic production of 56 million barrels of crude oil (valuing Rs 25,650 crore) and 920 million standard cubic meter of natural gas (valuing Rs 550 crore) had been deferred during October 2005 to March 2015.” In a new twist, now ONGC wants full control over the fields and the PSU has been writing to the ministry for the same for the past several years but there has been no response yet.
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