Even as a bemused Bombay high court tries to bring about a rapprochement between the battling gas majors-- RIL and NTPC—the facts that stare everybody in the face say that if the impasse continues or RIL is forced to agree to an unlimited liability in the case, it will harm not only the supplier but also the receiver for not making a “bankable contract”. This makes sense if you take into account the rising global gas prices – it is already $9 mmbtu in the United States of America and rising. According to an oil ministry note, RIL had won the NTPC tender quoting a delivered price of $2.86 mmbtu on gross heat of value. This price was (at the time of the agreement) $ 1.23 mmbtu cheaper than the $4.41 offer of Petronet and Petronas. Even today RIL offer is cheaper as the price in the US is hovering at $9 mmbtu. And with the prices expected to go north, the US prices will dictate the global ones. Now NTPC wants the current deal with the RIL to be self-perpetuating, with unlimited liability. This would be unacceptable to any business. And if NTPC wants this “deal” with the RIL to be a benchmark for all future business in gas, the government of India should note that it will affect the PSU energy sector comprising ONGC and GAIL as well. Will these government enterprises too sell gas at a loss? Another issue that is not being given due thought is the matter of “bankability of the contract”. As a recent news report, quoting MoPNG sources rightly pointed out -- “ if a contract is not bankable, it neither works for the supplier nor the receiver. NTPC has scuppered good efforts by persistently refusing to discuss bankability issues.”
But NTPC has made up its mind -- post the death of the power minister,
P. M Sayeed—to take RIL to court claiming that RIL could not “deviate” from the terms it agreed to during the bidding process. Another question that arises is whether a letter of intent is the same as signing a contract? In the case of RIL and NTPC, RIL had only given a letter of intent. As a legal eagle said, “ It is like sagai (engagement) and shaadi (marriage). A sagai may or may not become a shaadi.” Interestingly, this has added another dimension to the issue – this could become a major bone of contention between the two Ambani brothers again (and they have just emerged from a period of strife). Mr Anil Ambani’s power industry is watching the fracas with interest, as they too would benefit from the NTPC deal, they too would try to hold RIL to ransom over supply of gas to the Dadri power plant. Now, can we say we are soon going to see “Ambani Vs Ambani - II “? Also, there are whispers already of the involvement of Amar Singh in egging on the power ministry by influencing a powerful member therein ….namely the power secretary, Mr R. V. Sahi. It is also being rumored that Sahi is being bankrolled by the ADA-Amar Singh combine.

We the poor power consumers can only wait and watch in apprehension, with no solution to the power shortages in sight. (National Press Agency)