Raju prepares ministry response to CAG report

Vol 14, PW 26 (30 Jun 11) People & Policy

Joint secretary exploration DN Narasimha Raju won’t be asked to leave the oil ministry on July 1, as was earlier thought.

Raju can thank the government’s audit watchdog Comptroller and Auditor General of India (CAG) for this reprieve. The widely respected CAG submitted a draft report on June 8 alleging oil ministry and DGH collusion in a decision to give Reliance special treatment when in 2007 it agreed a four-fold CAPEX increase of the D6 development budget, allegedly in violation of the PSC.

Similar (dubious) ‘goodwill’ was granted to Cairn in Rajasthan, alleges the draft CAG report. As expected the findings have caused national uproar, forcing oil minister Jaipal Reddy to reverse his decision to expel Raju from the ministry.

With just eight weeks to respond to the allegations, replacing Raju would have been suicidal, argue sources. His five-year stint in the oil ministry gives him intimate knowledge of Reliance and Cairn’s activities, making him ideally placed to draft the government response.

As such Reddy, against his better judgement, has changed his mind about replacing Raju from July 1, and wants him to lead the ministry charge against CAG’s allegations. “Thanks to CAG,” says an official, “Raju has become indispensable.

Preparing a response in eight weeks without him would have been impossible.” Senior oil ministry and DGH officials are meeting almost every day - including Sundays - to prepare their defence.

On (Tuesday) June 21, for example, oil secretary Girish Chaturvedi, Raju and oil ministry director exploration Partha Das spent an entire day at the DGH. Next day, and the day after, Raju and Das again spent time at the DGH.

Then again on (Sunday) June 26, Raju, Das, and two ministry officials, were at the DGH for briefings on Reliance and Cairn’s development plans.

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