PTI cited a senior government official as saying that the CAG has agreed to restrict its audit of Reliance Industries’ KG-D6 block to financial scrutiny of the spending on the flagging gas fields and a performance audit, if any, would be done of the Oil Ministry.
The official who wished not to be identified said that “CAG had a few days back given to us in writing that the audit of Block KG-DWN-98/3 will be strictly as per Section 1.9 of the Accounting Procedure to the Production Sharing Contract.”
The PSC provides for a financial audit checking of the contractor’s accounts to verify the charges and credits, but not a performance audit that scrutinizes efficacies of processes or technology used in the complex deep sea operations.
The official said that “CAG has agreed for a financial audit and a performance audit if it has to be conducted, will be done of the Petroleum Ministry and/or the Directorate General of Hydrocarbons.”
Official said that RIL will provide any document needed in doing such an audit.
Sources however said that the CAG statement did not mean an end to the stalemate between the official auditor and RIL.
They said that the company, to be begin with, may refuse to provide documents related to the tendering process it followed for buying equipment or in selection of service providers, something which is unlikely to be acceptable to CAG.
The auditor may want to examine whether the Government’s profit take from KG-D6 and its subsidy output on power and fertilizer increased on account of use of imported LNG due to KG-D6 output of just 23 million standard cubic meter per day not matching the projected profile of 80 million standard cubic meter per day.
Source:
http://www.steelguru.com/indian_news/CAG_has_agreed_to_financial_audit_KGD6_block/294951.html
