In a letter to the union petroleum ministry, the Comptroller and Auditor General of India (CAG) warned that any increase in capital expenditure by Reliance Industries (RIL) in its KG-D6 basin may have significant adverse impact on government’s financial interests.
Therefore, the CAG advised the ministry not to permit any investment plan by the company in the gas field unless RIL allows CAG unfettered access to audit its spendings.
The CAG wrote this letter following media reports about the ministry giving nod to RIL’s annual capex for KG-D6 that have been pending for past three years.
The ministry is yet to sign on resolutions approving capital expenditure on the KG-D6 block for 2010-11, 2011-12 and 2012-13 fiscal pending resolution of CAG audit of spending on the block.
The ministry wants RIL to give CAG “unfettered access to account books” and pending that it has not approved the firm’s investment proposals including annual budget for three years.
In the letter, the auditor suggested the ministry to examine all relevant issues closely and carefully before considering the desirability of any future approvals of capital expenditure through the annual work programme and budget, development plans or otherwise, except those of an emergent nature.
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