NTPC not asked to sign deal with Reliance: Government

The central government Monday said it has not issued any directive to the state-run power major NTPC, formerly National Thermal Power Corp, to sign a gas purchase deal with Reliance Industries Ltd (RIL).

"Government has not issued any instruction to NTPC for signing of gas purchase deal with RIL," Minister of State for Power Bharatsinh Solanki said in a written reply tabled in Rajya Sabha.

Solanki said RIL had been found to be the lowest bidder for NTPC's 17-year contract for supply of gas to its Kawas-II and Gandhar-II power projects.

The power company had issued a letter of intent in June 2004, saying RIL would supply gas at the rate of $2.34 per million metric British thermal units (mmbtu) from the Krishna-Godavari (KG) basin.

But RIL did not come forward to sign the gas sale and purchase agreement (GSPA), and instead sought substantial changes.

"The changes sought by RIL on the accepted draft GSPA would have altered the basic complexion of the contract and were not acceptable to NTPC," Solanki noted.

Despite efforts to persuade RIL, there was no progress made to sign the agreement, he added.

"However, in spite of all the efforts, RIL did not sign the GSPA agreed during the bidding process, instead RIL unilaterally signed a contract which was not in line with the agreed GSPA and that left NTPC with no alternative other than taking legal recourse," the minister said.

Meanwhile, NTPC has asked the power ministry to look into easing its gas shortage at power stations through additional allocation from the gas allotted to the power sector from the KG basin by the empower group of ministers, "without prejudice to NTPC's suit in Bombay High Court".