Mani wants details of PSU links to Hinduja group

Vol 9, PW 7 (14 Jul 05) People & Policy

Mani Shankar Aiyar has asked Indian Oil and GAIL to reveal their commercial and business links with the powerful Hinduja business group.

Last month, both companies submitted elaborate replies setting out their existing and proposed ties with the Hinduja group in Iran and Qatar. IOC submitted a two-page response in which it gave details of an agency agreement signed on 22nd August 2003 with Iranian incorporated Ashoka Company.

Under this agreement, IOC said Ashoka Company would receive a service fee on successful conclusion of contracts that it secured for the Indian state-owned refiner in Iran. These could include training and consultancy, export of petroleum products, or operation and maintenance of refineries.

IOC said this agreement runs till 21st August 2006 and covers only contracts worth up to $50m, adding that it has so far signed no deal in Iran. Another agreement between IOC and the Hinduja group concerns the proposed 2.5m t/y LNG import terminal at Ennore in Tamil Nadu.

IOC said that on 1st October 2004 it signed a MoU with Ashok Leyland Project Services, another Hinduja company. This agreement allows Ashok Leyland to set up a power project using regassified LNG from the Ennore LNG terminal.

We understand Ashok Leyland wanted to become a member of the IOC and Engineers India consortium that is trying to win the contract to revamp Tehran and Tabriz refineries. But according to IOC, the Hinduja group has been advised that its services are not required for this project.

IOC made it clear that no outside agencies were involved in concluding the contract to import 5m t/y LNG for 25 years from Iran or for the import of crude oil from Iran. Other than these, adds IOC, there is no other understanding between IOC and Ashoka Leyland to secure projects from Iran or Qatar.