Rajasthan CM calls ONGC 'unfair and unreasonable'

Jaipur, Jan 16: The agreement reached between Cairn India and Oil and Natural Gas Corp for carrying the crude from the Barmer fields by pipeline instead of setting up a refinery in the state has caused heart burn and political storm in the state.

Rajasthan Chief Minister Vasundhara Raje has accused the ONGC of seeking 'unreasonable incentives' from the state to back out from its earlier decision of setting up a refinery in the state.

The Chief Minister, who is being accused of mishandling the issue of the refinery, wrote a letter to Union Minister for Petroleum and Natural Gas Murli Deora calling the ONGC ''unfair and unreasonable'' in their demands of concessions and incentives.

''ONGC has asked the state government fiscal incentives of massive magnitude for operationalising their earlier decision of setting up a refinery in Rajasthan...The sheer enormity, scale and prima facie unreasonability of the incentives sought by ONGC gives rise to an understandably uneasy feeling, that this is being done to back track from the decision taken earlier by the ONGC themselves,'' the letter released by the Chief Minister read.

She said the amount asked from the state government as VAT deferral/interest free unsecured loan in lieu thereof amounted to a staggering Rs 21,000 crore as against the envisaged investment of Rs 12,000 crore, not withstanding the fact that crude is produced within the state.

She alleged that the relief sought is so far in excess of what has been agreed to for setting up of refinery in other states like Punjab, Madhya Pradesh and Orrisa which did not even offer the advantage of crude production.

After the discovery of crude in Barmer-Sanchore basin in Rajasthan, the government had nominated ONGC's subsidiary MRPL to purchase the entire crude prodcued by the Cairn Energy India Ltd in September 2005.

UNI