This Article is From Jul 26, 2014

Gujarat Maritime Board Decision Gave Undue Benefit to Reliance Petroleum: CAG

Gujarat Maritime Board Decision Gave Undue Benefit to Reliance Petroleum: CAG
Gandhinagar:

The state government-run Gujarat Maritime Board handed an "undue favor" to Reliance Petroleum Ltd (RPL) by allowing it to pay only half the stipulated port fees, which led to a loss of Rs 649.29 crore, a report of Comptroller and Auditor General of India has said.

The CAG report on ports and transport department for the year ended March 31, 2013 was tabled in the Assembly today.

As per the report, GMB entered into an agreement with RPL in July 1999 to allow the petroleum giant to build its own captive jetty in Sikka near Jamnagar, for its liquid and gas cargo.

According to CAG, the cost of construction of the jetty was Rs 362.01 crore. As per the agreement and the government policy to encourage private players, GMB allowed a 50 per cent rebate on the stipulated wharfage (port fees) at the rate of Rs 36 per metric tonne to RPL till construction cost was recovered.

RPL paid Rs 18 per MT of cargo handled at it jetty after it commenced the operations in 1999. However, according to CAG, even after RPL recovered the cost of construction in January 2006, GMB allowed RPL to pay at the same rate.

In June 2010, RPL added Rs 138.92 crore to the original cost of construction, taking it to Rs 452.51, claimed CAG. So, GMB allowed RPL to pay at the concessional rate till March 2012, CAG said. CAG concluded that erroneous calculation by GMB in determining full wharfage and actual set-off "led to short recovery of wharfage charges of Rs 649.29 crore as undue favor to RPL".

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