'Mukesh Ambani runs India, not PM'

Activist-turned-politician Arvind Kejriwal yesterday accused the Prime Minister of selling out the country to allow windfall profits to Mukesh Ambani's Reliance over its contract to develop the country's key natural gas field in the Krishna-Godavari (KG) basin.

He said the government appears to be leaning towards allowing Reliance to charge more for the gas it supplies, a sanction which violates the contract and would allow the company to benefit by Rs 43,000 crore.

Reddy reason: Arvind Kejriwal said the transfer of Jaipal Reddy out of the Oil Ministry in Sunday's cabinet reshuffle was a direct consequence of trying to keep Reliance in check. File pic

"It appears that Mukesh Ambani and not the PM runs the country," Kejriwal said. "The PM's heart beats for Reliance and not the people of India," he declared.

However, Reliance has refuted the charges affirmed by Kejriwal and other members of IAC. "Irresponsible allegations made by IAC at the behest of vested interests without basic understanding of the complexities of a project of this nature do not merit a response," a statement of Reliance read.

Kejriwal said the transfer of Jaipal Reddy out of the Oil Ministry in Sunday's cabinet reshuffle was a direct consequence of trying to keep Reliance in check, which isolated him within the government.

No matter which party is in power, Ambani calls the shots, "both the Congress and the BJP are in his pocket," Kejriwal alleged. He said in 2000, the BJP-led NDA coalition gave Reliance a sweetheart deal to produce gas from the D6 fields in the KG basin off the Andhra Pradesh coast. The Congress, he said, "faithfully implemented" the same deal when it came to power in 2004.

Between the two regimes, Kejriwal believes, Reliance has been allowed to violate fundamentals of the deal, including the price at which it would sell gas to the government. He said that Reliance has over-charged the government for gas and failed to deliver the required output.

Originally, Reliance was to supply gas to the state-run NTPC for the next 17 years at $2.3 per unit. But the company revised the rate to $4.2 per unit in 2007. Now, it wants to raise the prices of gas again to 14 dollars per unit (from about 4$ per unit), though contractually, a revision is not allowed till 2014. If a price hike is allowed now, Kejriwal said, Reliance will benefit by 43,000 crores.

"Was (new oil minister) Veerappa Moily brought in to allow this? In exchange for this sanction, will Reliance fund the Congress' election campaign - is this the arrangement?" Kejriwal queried.

Meanwhile, the Congress rubbished the charges levelled by Kejriwal. "They are not worth a comment from any political party," said party spokesperson PC Chacko. Congress general secretary BK Hari Prasad also said "the charges were baseless". u00a0