THE STATESMAN Wednesday, 26 May 2010
Protecting Ambani family values!
Government 420 at work? -Rajinder Puri
Thanks to the Supreme Court (SC) the law has seldom appeared as a bigger ass. After the court ruled on the dispute between the Ambani brothers this scribe had described the judgment as gas without substance. The SC unerringly pinpointed the central issue. It said that the Krishna-Godavari gas was a national asset that belonged to the people. The pricing of gas could not be arbitrary. It affirmed that the final decision rested with the government. Very good! But this scribe asked how that would address the problem if Reliance could exercise total influence over the government — as several people allege that it does!
Sure enough, on May 19 the government more than doubled the price of natural gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd to USD 4.20 per million British thermal unit, at par with the rate at which Mukesh Ambani decided that Reliance should sell its gas. In one sense this figure is somewhat suggestive. Section 420 of the Indian Penal Code relates to fraud and cheating!
Consider these facts. After the dispute between the Ambani brothers surfaced the Prime Minister said that both brothers should reach accord. After all, harmonious relationship is an important family value. Later the Supreme Court echoed the PM and advised both brothers to make up. Dear me, what touching concern about protecting the family values of India ’s richest businessmen! Any thoughts about the public that pays for the gas?
This scribe had pointed out that the central issue related to the inexplicable withdrawal from the Krishna-Godavari gas project by the public owned Oil and Natural Gas Commission (ONGC) which had discovered gas in that basin. For all practical purpose it was as unjust for the government to arbitrarily determine the gas price as it was for a monopoly private firm. The induction of other players was required to determine a price based on market forces. The final decision of the government had to be tempered by competition in the market. That was scuttled by ONGC’s highly questionable withdrawal from the Krishna-Godavari project leaving the field clear for Reliance.
On May 8 this scribe wrote: “There is a Competition Commission established to ensure that monopoly does not distort market forces. Was it sleeping?” Perhaps this Commission, like the PM and the SC, was equally concerned about protecting the family values of the Ambani clan. Well, now the Ambani brothers have made up. Bravo! Family values have been protected. One brother will have monopoly to produce the gas; the other will have monopoly to sell it. Profits should soar. Profit will remain in the family. Between them the brothers can influence almost the entire political class. The Ambanis and politicians are like a joint family. That makes it better. Profit will remain in the joint family.
