Running to the ministry for help in finding solution

Vol 8, PW 1 (07 Apr 04) Midstream & Downstream

Continued disagreement between Reliance and HPCL means the oil ministry will inevitably have to step in and play umpire.

By the 1st March deadline to send in Expressions of Interest only Reliance had responded. A fortnight later, unable to agree crucial issues, HPCL and Reliance approached the ministry to find a way out.

We understand ministry officials are reluctant to dictate a commercial agreement between both parties and asked them to resolve the matter within the next fortnight. We told them this is a purely commercial issue and weve given them time to discuss it, says a ministry source.

However, discussions cannot and should not go on infinitely. There are just two ways: either they agree or they do not agree.

Till date, disagreement persists and the ministry is relaxed about when it will step in. Theres no hard and fast rule about these things.

Neither party has got back to us saying that they are yet unable to agree, says our source. Discussions are still going on.

Well wait till they come to us. Separately, the oil ministry is now getting ready to give Reliance the green light to begin laying its own proposed six cross-country petroleum product pipelines for which Expressions of Interest were invited in May 2003.

Reliance did not receive expressions of interest by the end of the three-month deadline for any of these six pipelines. In theory this should allow Reliance to begin work on its plans.

But the ministry wants certain guarantees from Reliance before starting work. One of these is that any Right of Way permission obtained by Reliance from landowners will be used only for the specified pipeline and that too within a certain time frame.

This and other (related) issues are being worked out internally. As soon as we are ready well inform Reliance.