In the hot seat: 'Oily' Moily's Kejriwal-sized dilemma

Veerappa Moily has a problem: he has to run a ministry from inside a goldfish bowl. Where ‘Oily’ Moily’s every slithery move will be subjected to intense scrutiny - for signs that he is being too soft on Reliance Industries.

That’s a direct fallout from Arvind Kejriwal’s and Prashant Bhushan’s high-decibel campaign on Wednesday to draw attention to the manner in which Jaipal Reddy was eased out of the Ministry ostensibly because he resisted efforts by Reliance Industries to raise the price of gas extracted from the Krishna-Godavari D-6 block.

And, worse, Moily stands tainted-by-default even before he can make a jotting on a sarkari file - on the consideration that it was he who replaced an ‘honest’ Jaipal Reddy. That marks Moily, in Kejriwal’s estimation, as the one on whom his government relies to do the dirty business that Reddy didn’t.

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That’s a heavy burden for Moily, given that his government has only barely begun to crawl out of the ditch of a policy paralysis of three-plus years, during which a general societal hysteria over corruption in corporate deals practically froze all decision-making within the government.

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The differences that may prove irreconcilable between the various players are already beginning to take a toll on decision-making in the Ministry. On Wednesday, his ministry was constrained to defer a meeting to reconcile differences between Reliance Industries and the Comptroller and Auditor General in respect of the scope of an audit of the production-sharing contract between the government and RIL.

Indian Express reports that Reliance Industries has set two conditions for submitting the contract to an audit: the first, that the findings of the audit should be governed by the confidentiality arrangement between RIL and the government; and, second, that the audit should be restricted merely to accounting procedures alone.

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The CAG refuses to abide by such a confidentiality arrangement, since its audit reports are required by law to be tabled in Parliament. The constitutional auditing body also reasons that it reserves the right to interpret the scope of the audit, and that if necessary, it would also scrutinise other aspects of the contract, including the contentious issue of the capital investments made by Reliance Industries.

One of Jaipal Reddy’s last acts in the ministry from which he was eased out was to accede to a long-standing demand from Reliance Industries to be allowed to invest more in the KG-D6 gas fields in order to ramp up production. However, Reddy’s grant of permission was conditional on Reliance Industries accepting a CAG audit of the gas fields for the period from 2008-09 to 2011-12.

In May 2012, the Petroleum Ministry had written to Reliance to say that it had “failed to fulfill” its obligations and to abide by the terms of the production-sharing contract - and, in fact was in “deliberate and willful breach” of the contract. Reliance Industries’ actions had “caused immense loss and prejudice to the government,” the Ministry had claimed.

The Ministry then directed Reliance Industries to “comply with the approved Amended IDP” to meet the targets for committed gas production rates and to submit to the government a detailed plan providing the timelines and the steps it planned to take to “remedy the default” and to abide by the amended Intial Field Development Plan (IDP).

In other words, virtually every syllable of every letter from Jaipal Reddy’s erstwhile Ministry conveyed government determination to penalise Reliance Industries for its failure to abide by its end of the contract. And for his exertions, it is now widely suspected, Reddy was eased out - and Moily brought in.

Now, ‘Oily’ Moily, who was evidently brought in to grease the tracks, has to deal with the same issues. Except that every one of his moves will be watched closely for signs of any extraordinary concessions being made to Reliance Industries - or for validation of the suspicion that he has been brought in only to do the dirty business that Reddy declined to.

Some people would call it ‘open government’ except that it’s been closed season for open government for some years now. Today, Moily is in the hotseat, and owing to the Kejriwal effect, he’s already feeling the heat…