Monday, November 05, 2012

Ambani’s Reliance Industries, black gold in KG Basin & 2 ex-bureaucrats

BP CEO Robert Dudley with Mukesh Ambani in Sep 2011
THE Reliance Industries Ltd, the most valued private sector company in India, has said it welcomes any form of audit by Comptroller and Auditor General of India, something the Mukesh Ambani-owned company was not very comfortable about, even a fortnight ago. But here is how two former bureaucrats became the game-changers by rewriting the traditional rules of keeping a safe distance from the high and mighty of the corporate India.
For quite sometime, 1972 batch retired IAS and CAG Vinod Rai was demanding that his organisation be give access to go beyond conducting a mere scrutiny of RIL books in the KG basin operation where the company had been partnering with the government to extract oil and gas. The petroleum ministry was however not so liberal in allowing the national auditor to do a comprehensive performance audit.
Though the government has been accusing the CAG of overstepping its constitutional rights, Rai recently managed a strong backing from Supreme Court of India when SC said that CAG was not a mere munimji (accountant). And that can be interpreted as allowing the CAG to carry out a performance audit of companies which partner with the government in PPP format. The auditor has also brought out another report on Delhi airport PPP venture with government and GMR Infrastructure as partners.
But it was another ex-bureaucrat, now politician, Arvind Kejriwal who forced RIL to issue a statement to clarify once and for all that the company was not opposed to CAG’s performance audit. The tone and tenure of Kejriwal’s accusation including use of some words during a televised press meet could be highly objectionable, but the former I-T official made it easier for CAG Vinod Rai to expect that the petroleum ministry would soon give its formal nod for the comprehensive audit. And that will allow the CAG to go deeper into RIL’s KG basin stake sell worth $7.5 billion to British Petroleum. The CAG, for sure, will come out with yet another huge figure of loss to national exchequer which it had done both in case of 2G and coal allocation.
The RIL in a statement issued on Saturday said it is fully confident of CAG’s technical capabilities but added that the company “welcomes comments on operational matters if such comments come from experts having the requisite knowledge of the complexities of deep water operations in the oil and gas sector.”
As RIL issued the statement on CAG on Saturday, Rai was speaking at the 11th All India Lokayuktas Conference 2012 in New Delhi. Rai was making a point by saying that the economic growth cannot be made sustainable, and inclusive, unless it is based on transparency and accountability.
Rai added that his effort would be to achieve excellence and not celebrate mediocrity. Only time will say where is the end to this saga.


  1. Good reading but nothing new

  2. After all transparency in government and in private sector results in higher faith and confidence by the citizenry, resulting in satisfaction and constructive feedback. Unfortunately, Indian's Babu's fiefdom until Shri. Vinod Rai became CAG, Shri. Subba Rao became RBI Governor and Arvind Kejriwal (former IRS) started the IAC movement, it was status quo, with the bureaucrats nodding their heads in favour of their political masters and functioned like lap dogs. Unfortunately these Indian Babus have been revered for too long and what we need is dismantling of the entire I*Services. These services have been a waste and has resulted in these I*Services officers enriching themselves, and ensuring their families are well taken care of, and to this extent they are subservient to their political masters. The people of India have paid a heavy price, many who have led miserable lives in poverty and died in poverty even after 65 years of Independence, of which 61 years was ruled by Congress. After all our Babus and Netas have total lack of ethics and care two hoots about the judiciary, since a case to prosecute a Babu for illegality takes at least 20 years to be disposed off through the judicial system. If you list in one column illegality committed by babus against the numbers prosecuted and convicted, it will reveal that far fewer Babus are prosecuted and convicted. It is high time each state devises its own governance system and gives the central government, authority over foreign affairs, and defence matters. The rest should be decided by the states, like the United States of America.