30 March 2012

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CAG Report Gujarat GSPC Loss Rs.5000 Crore benefits to Adani Energy Essar Steel and others

CAG Report Gujarat GSPC Loss Rs.5000 Crore benefits to Adani Energy Essar Steel and others



Today The report of the Comptroller and Auditor General (CAG) was tabled in the state assembly.

The Comptroller and Auditor General (CAG) today pulled up Gujarat government company, Gujarat State Petroleum Corporation (GSPC) for extending undue benefits to Adani Energy and Essar Steel.

CAG said that company's poor management of oil and gas exploration business led to over Rs 5,000 Crore loss.

[ Loss of Rs.5000 Crore to Indian Citizens. ]

GSPC bought natural gas from the open market (spot market) and sold it to the Adanis at a price lower than the purchase price.

CAG estimated that Adani Energy received undue benefit of Rs 70.54 Crore in the process.

Do you think in the above case kickbacks were paid?
Do you think in the above case corruption happened?

GSPC passed on undue benefit of Rs 12.02 Crore to Essar Steel Ltd by way of waiver of capacity charges contrary to the provision of gas transmission agreement.

Do you think in the above case kickbacks were paid?
Do you think in the above case corruption happened?

CAG was severely critical of GSPC's operations in the Krishna Godavari basin gas block where improper assessment of technical and financial issues led to drilling cost shooting up to USD 1.302 billion as against estimate of USD 102.23 million.

CAG said that The main reasons for the incorrect estimation was adoption of deficient geological model prepared by its joint venture partner, Geo Global Resources of Canada, which led to escalation in the cost of exploration phase from Rs 531.94 Crore to Rs 6,265.68 Crore.

GSPC had given Geo Global Resources a stake in the block without any financial contribution on the ground that it was a technical expert.

As a result, GSPC had to incur the Canadian company's share of USD 175.07 million towards the exploration cost besides losing Rs 104.14 crore in interest during 2007-11.

How can an International company do such error?

Do you think CBI should look into this case and error?

CAG also said that against the estimated drilling rate per day of 27.76 meters, the actual rate was 22.49 meters in drilling 16 wells in KG offshore block between July 2004 and April 2010.
This resulted in avoidable expenditure of Rs 180.91 crore on drilling work.

HT reported that The CAG report says that Reliance Industries installed control and riser platforms in parts of KG block licensed to GSPC. They did so without the consent of the government. As a result, GSPC would be responsible for the safety and security of RIL's structure for its entire life period.

Do you think corruption happened in the above matters?

Reality views by sm –

Friday, March 30, 2012

Tags – CAG Gujarat Loss Rs.5000 Crore

2 comments:

Nathan March 31, 2012  

So many acronyms...