Mumbai, June 8: Reliance Industries will supply gas to Reliance Energy’s power project at Dadri in Uttar Pradesh, fuelling hopes that the rift is narrowing between the Ambani brothers who own each of the two firms.
Billed as the world’s largest gas-based generation plant at a single site, the project was caught in the crossfire between the Reliance scions in recent months. That the Mukesh-controlled Reliance Industries will supply fuel to the energy major run by his younger brother is being seen as a sign that a settlement of ownership issues is getting crystallised. Reports over the past weeks have suggested that a deal is weeks away.
The announcement on gas supply came today from Anil, who was presiding over the annual meeting of Reliance Energy as its chairman ' his first interaction with shareholders since the row came to the fore last year.
The 3740-MW project at Dadri needs feedstock from Reliance Industries to become commercially feasible. “I am happy to report that gas from Reliance Industries will be available for the Dhirubhai Ambani Energy City,” said Anil, attired in a dark grey suit and a purple-white tie.
In mid-January, at the height of the Ambani showdown, Reliance Energy said the Dadri plant would take two years more than the original commissioning schedule of 2006-07. This was based on the commitment that Reliance Industries would supply gas from the Krishna-Godavari Basin. In June last year, Reliance Energy signed an agreement under which Uttar Pradesh promised to buy 40 per cent of the power from the unit.
The REL board indicated it would keep its “options open”. This was interpreted to mean that the project could be completed before 2008-09 ' if the company ties up gas elsewhere. “Multiple global producers of gas are keen to supply fuel to the Dadri project. In the event that gas availability can be secured from sources other than Reliance Industries, the start-up date could be potentially accelerated for implementation,” the company had written to stock exchanges. The move was seen as a tactic to pressure RIL to speed up the supply of gas.
RIL had claimed at one point of time that it was kept “in the dark on the Dadri unit”. The power major refuted this, saying all board members of RIL attended the meeting that cleared the plan.
At its December 27 board meeting, Reliance Industries declared “reasonable assistance” to REL in several respects, without affecting “its own operations and projects”.
At the Bhaidas Hall today, the auditorium in Vile Parle where Bollywood stars like Paresh Rawal enact plays, Anil was as much a celebrity as the stage stalwarts. Sniffer dogs were brought in to ensure that the 1000-seater hall was sanitised and sealed. Outside, scores of lathi-wielding policemen worked the milling investors.
Once the meeting began, there was no mention of the dispute. Anil, a bit tense initially, dropped guard as he started reading from a nine-page statement, later distributed to investors.