New Delhi: The Rangarajan Committee appointed by the Prime Minister reviewing the oil and gas contracts has disclosed CAG’s authority to audit expenses as unquestionable. “Audit process is prerogative of CAG and so the power of audit remains with CAG. The blocks with low value can be audited by panel of auditors formed by CAG and for high value blocks,” said C Rangarajan.
The report outlined by the committee has further put forth a suggestion to shun the present cost recovery model allowing operators like Reliance Industries Ltd (RIL) to first recover the investments before sharing profits with government. However, RIL has argued that while it is open to CAG to undertake a financial scrutiny, the Production Sharing Contract does not provide a performance audit by the official auditor.
EPC News Bureau
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