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Published on Leave a comment on R-ADAG caught swindling Rs 1,000 cr from 7 State Govts

Mumbai, 25th January, 2017: Reliance Anil Dhirubhai Ambani Group (R-ADAG) was caught with its hands in the proverbial cookie jar, and that too by the Supreme Court! R-ADAG tried to twist the terms of its Power Purchase Agreement with seven states, and make a profit of well over Rs 1,000/- crore by making the states count one day as one year (31st March 2013 is the previous financial year, and 1st April 2013 is the next financial year. Get it?) And moreover, when All Indian Power Engineers' Federation (AIPEF) blew the whistle and prevented it, R-ADAG tried to sue AIPEF's office-bearers for damages of Rs 1,000 crore! Ulta chor kitwal ko dante!

The true significance of Supreme Court’s 8th December 2016 judgment on Reliance's Sasan Ultra Mega Power Project (UMPP) Commercial Operation Date (COD) has gone unreported. Mainstream media has avoided reporting important thing, namely:

1) By exploiting a loophole in the Power Purchase Agreements (PPA) signed with seven states of India, Reliance Power wanted to hugely overcharge them. Madhya Pradesh, where the power project is located, would have had to pay over Rs 400 crore extra to Sasan Power Ltd. based on their false claim that Unit 3 of the UMPP started commercial operations on March 31, 2013. (Counting interest costs, the impact on MP would be around Rs 450 crore.) The PPA specifies that power is to be supplied @70 paise per unit for the first two years, and hiked up to Rs 1.31 per unit from the third year. But, if Reliance Power’s claim of March 31, 2013 as the commercial operations date (COD) were to be accepted by the seven power-purchasing states, then the first year of power purchase would be only one day long, i.e. starting on 31st March, 2013 and ending on April 1, 2013. Such a stand would enable Sasan to start charging the higher power tariff of Rs 1.31 per unit from April 1, 2014, instead of April 1, 2015. This would have resulted in a wrongful gain of Rs 1050 crore to Sasan Power Ltd, coming out of the pocket of the Indian power consumer and taxpayer.

2) Moreover, were such a claim to be accepted, it would have also resulted in incalculable loss to the nation in terms of power-generation, as it would have removed all the deadlines and left Sasan Power Ltd. under no pressure to fully operationalize Unit 3 in a time-bound manner. On 31st March 2013, Unit 3 was functioning at a mere 17% of demand. The unit became fully operational and achieved the capacity to fulfill 95% demand only in August 2013. If 31st March were considered the start of the COD by waiving this condition, it is possible and even likely that the date on which 95% demand capacity was achieved would have been pushed back even further. The heart of the PPA is the condition that Unit 3 had to be functioning at over 95% of demand, for the Commercial Operation Date to commence. By seeking to subvert the heart of the contract, R-ADAG betrayed its profiteering tendencies, and its willingness to sacrifice the safety and well-being of the national grid.

3) Sasan Power would have got away with looting India, were it not for the persistent efforts of All Indian Power Engineers Federation (AIPEF), spearheaded by its chief patron Er. Padamjit Singh of Delhi and Er. Shailendra Dubey of Lucknow.  It is heartening to see the activist spirit with which this professional body defended the national interest before the Central Electricity Regulatory Commission and its Appellate Tribunal, and before the higher judiciary.

4) Sasan Power Limited tried to misuse Bombay High Court as a forum to intimidate AIPEF to prevent it from pursuing the matter before appropriate forums, including higher judiciary. It malafidely tried to get an injunction from Bombay High Court in August 2016 for muzzling and stalling AIPEF, and claiming damages of Rs 1,000/- crore, although the same matter was already reaching Supreme Court in Appeal.

5) There is significance in the fact that prominent Congress leaders Kapil Sibal and P Chidambaram, in their capacity as senior advocates, attempted to defend the indefensible. This helps to remind the public that Anil Ambani has friends on both sides of the political fence. No matter who wins elections – BJP or Congress – big money wins every time. The Congress camp may shout from rooftops that Prime Minister Narendra Modi is protecting the business interests of the “two brothers”, but one must bear in mind that Congress leaders also have their interests at heart.

ISSUED IN PUBLIC INTEREST BY
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com

Posted in Public Interest by
Sulaiman Bhimani
9323642081
sulaimanbhimani11@gmail.com 

15

What is the Reliance Gas Price issue? Why has Arvind Kejriwal filed an FIR against Mukesh Ambani? Why is there so little clear information on the issue? Read the easy to understand version.
Published on 15 Comments on Reliance Gas Price issue and Mukesh Ambani FIR for dummies

What is the Reliance Gas Price issue?

To put it in one line, it is an objection to higher pricing for natural gas which has little justification and has been brought about through unclear reasoning.

What is the complete story of Reliance Gas Scam?

After the Government of India opened up hydrocarbon exploration and prodution to private and foreign players in 1991, Reliance Industries got the rights to explore the D6 block as per NELP (New Exploration and Licening policy). Here, Reliance Industries discovered India's biggest gas reserves in the Krishna Godavari basin near the Andhra coast and the site is called Dhirubai 6 (which is where the "KG D6 basin" come from, in news related with this subject). The size of the block is 7,645 square kilometers and is officially recorded as KG-DWN-98/1.

The D6 was to produce 40 million MMSCD (Million Cubic meters per day), which was revised to 80 MMSCD. Initial development cost at $2.4 billion was revised through an “addendum” in 2006 to $5.2 billion in the first phase and $3.3 billion in the second phase.

When Reliance Industries split between Mukesh Ambani and Anil Ambani, a secret pact between the Ambani brothers became public. Anil Ambani owned RNRL (Reliance Natural Resources Ltd) claimed it had rights to gas from Reliance KG basin for 17 years at $2.34 per mmBtu (million British thermal unit). The Supreme Court finally settled the matter by asserting that ‘the government owns the gas till it reaches its ultimate consumer and parties must restrict their negotiation within the conditions of the government policy’.

None of the ministries involved in the process, including the oil ministry, raised the point that the gas reserves belonged to the country and was not a property of the Ambani family. Even the Prime Minister, ManMohan Singh meekly requested the brothers to settle their differences in the interests of the country.

The CAG Draft Report on the audit of the Production Sharing Contracts for the on-shore and off-shore oil and gas blocks showed that the Directorate General of Hydrocarbons (DGH) allowed Reliance Industries and other private operators to "gold-plate" the capital costs and make huge profits using an "Investment Multiplier", which meant that higher the capital cost, the larger the share of the profits of the private parties. If the cost is inflated enough and the supply of gas dwindles before it is recovered (the quantity cannot be ascertained, as the appraisal wasn't done), the government profit will mostly be "thenga", while Reliance "recovers" its invented investments.

Till the the capital costs are recovered, 90% of the petroleum/gas sold would be “cost” petroleum (covering Government royalty of 5%, operating costs, the costs of exploration, and the development cost of producing gas) and only 10% would be “profit” petroleum and Reliance gets the major share of the “profit” petroleum. The "Investment Multiplier" begins to increase (and thus the Government's share) only after Reliance Industries has recovered most of its investment.

So increasing the profit share for private parties and decreasing government share was as simple as pouring in funds well beyond those stated in initial bid. Increasing capital costs helps Reliance retain a much larger share of the profits in the initial years, while the Government gets its share only in the last phase, when the production declines.

The capital costs in KG Basin D-6 Block went up from $2.4 billion in the initial contract to $8.5 billion. This is not possible without the government cronyism allowing it and there lies the  KG basin gas scam. In the case of KG D9 basin, the Management Committee in which the Government had 2 nominees allowed the inflation of contracts.

The CAG Draft Report also brought out that if the company did not develop certain areas within the contracted area within the stipulated time, 25% of the area outside that discovered in 2004 and 2004 should have been relinquished. Instead, the DGH and the Ministry of Petroleum allowed the whole area to be designated as “discovery area” in violation of the contract. Actual amount of gas available was obfuscated by digging inadequate wells, and moving directly to commercial production without intermediate appraisal.

Add to this the high price of Reliance gas -- $4.2 per Million BTU (MBTU), fixed by the Empowered Group of Ministers headed by Pranab Mukherjee even when Reliance had admitted in Court that its production cost was $1.43 per MBTU and agreed to to supply gas at $2.34 to both NTPC and Anil Ambani Group, still making a profit of 50% (at this point, ONGC was supplying gas for half the price and gas production had not started in KG basin). Pranabda's Empowered Group of Ministers let him renege on this and demand $4.2 per MBTU, because he could not now supply gas for less than the "mandated price" set by the government" (No gas was coming out of the KG Basin still). Ministers may be "Empowered", but on behalf of whom were they acting?

So Reliance profits from every side

  • By over invoicing the capital costs paid to own affiliates without oversight, it makes substantial profits directly
  • By inflating project cost, it continues to get a larger share of profits for an additional time till the "investments" from are recovered.
  • Selling gas at multiple times the real cost (of which it retains a major chunk as "recovering investment")

In the meanwhile, fuel prices influence every aspect of life in terms of affordability and they are set to rise AGAIN. For the common man, this basically means "khaya piya kuch nahi, glass toda barah anna" only to find out that the broken glass has been kept there to con people into paying for breaking it.

The open letter by Surya P Sethi to the prime minister on the Rangarajan formula doubling the price of KG basin gas minces no words.

The Comptroller and Auditor General's findings and other independent reports reveal how crony capitalism benefited RIL. The pre-qualification norms were diluted to ensure RIL qualified. The claimed size of gas discoveries, the field development plans and the investment outlays proposed escaped rigorous due diligence. Above all, RIL's commitments under the PSC and the field development plans were not enforced.

RIL's clout was on full display when, despite serious objections from me and the then Cabinet Secretary, the 2007 Empowered Group of Ministers approved the price of $4.20 per million metric British Thermal Units (MMBTU) based on an RIL-crafted formula that was unique in the world for pricing natural gas. The $2.34/MMBTU bid by RIL, in a global tender, for the same gas was ignored. A sham price discovery exercise was permitted to justify the higher price that the approved formula delivered.

And Moily & Co have approved yet another price hike that doubles the price of gas from 1st April onwards. So, from $4.2 per unit, Reliance will sell for $8.4 per unit.

Why has Arvind Kejriwal filed an FIR against Mukesh Ambani?

Arvind Kejriwal cannot overrule the Central Government match fixing permissions and prices and such to suit their cronies (or is it puppet masters?), but he has done something that will add pressure to bring about accountability on thKG Basin gas price scam. He has filed an FIR for cheating against Mukesh Ambani, Moily and others for what is becoming known as the Mukesh Ambani gas scam. In particular, he is trying to stall the new price hike from April onwards.

Considering that the whole scam appears to be somewhat legal with "lapses", it is unclear how he can win the case, particularly with the two biggest political parties and media out to defend Mukesh Ambani, but it will pave the way for more serious actions by forcing the issue into more attention.

A country cannot afford to abandon national interest in the energy sector so lightly and still expect to thrive.

Why is there so little clear information or discussion on the issue?

Ambani owns controlling shares in 27 media and news channels. Vajpayee's son-in-law Ranjan Bhattacharya told Nira Radia (Radia tapes scandal) that Mukesh Ambani told him “Congress to ab apni dukaan hai.”. Mukesh Ambani and Narendra Modi hugged onstage in last year's Vibrant Gujarat and Akash Ambani attended Modi's rally in Mumbai. It is the Congress that has helped engineer the windfall in the first place. Not to mention when Arvind Kejriwal in November 2012 made these accusations, Mukesh Ambani lawyers sent notices to media organizations for airing them. What do you expect?

Please note that I am no economist, journalist, analyst or similar. I am a blogger with interest in issues of relevance to the common man of India and I seek information to understand what is happening. If there are any inaccuracies, please point them out in the comments and I will correct them.

2

Published on 2 Comments on Sailgate: PIL filed against irregularities in yachting – sport, services and import

A PIL has been filed by Anand Jondhale in the Mumbai High Court about irregularities in Sailing. Some of the stories are among those I exposed here. Others are ones I had been meaning to write. This quick post just places it all out for your convenience.

The PIL names:

  1. Union of India
  2. State of Maharashtra
  3. The Secretary of the Ministry of Youth Affairs and Sports
  4. President, The Yachting Association of India (YAI)
  5. Captain Homi Motivala
  6. Captain Arvind Raghuwanshi
  7.  Lt. Col Gautama Dutta
  8. Captain Monty Khanna
  9. Captain Rajesh Sarin
  10. The Commissioner of Customs
  11. Central Intelligence Unit
  12. The Chief Commissioner of Customs,Zone-I
  13. The Director of Income Tax (Intelligence)
  14. The Special Director,  Directorate of Enforcement
  15. The Ministry of Shipping Mercantile
  16. The Chief Surveyor and Marine Engineer
  17. The Secretary, Home Department
  18. Mr. Anil Ambani
  19. Mrs. Tina Ambani
  20. M/s. Reliance Transport & Travels Pvt. Ltd.
Quoting salient parts of the petition. You can download the original petition here: Sailgate - PIL filed in Mumbai High Court

This Petition is being moved for an exemplary action in relation to corruption by certain personnel of Armed forces in the Sports of Yachting, illegal commercial exploitation of boats/yachts for personal benefits without valid permissions and customs clearance which has resulted in huge misappropriation of taxpayers money spent by the Ministry of Youth Affairs and Sports for winning an Olympic Medal in the Sports of Yachting and the unchecked, unimpeded, unhindered, unrestricted movements of boats and yachts which has already caused a gigantic terror attack on the city of Mumbai on 26th November, 2008.

...

4.1 The Petitioner states that, the Government of India is spending crores of rupees through the Ministry of Youth Affairs and Sports to win an Olympic medal in the sport of yachting and this is done through Yachting Association of India (YAI) which is headed by none other than the Chief of Naval Staff. The Petitioner would like to bring the following facts to the notice and request for exemplary action in relation to corruption by certain personnel of the armed forces in the sport of yachting and illegal commercial exploitation of boats for personal benefits without valid permissions and customs clearance. The Petitioner states that, in June 2005, the Honorary Secretary General of the YAI had reported cases of misappropriation of Government funds by some serving / retired armed forces personnel. A xerox copy of report of the Honorary Secretary General of the YAI dated 03/06/2005 is annexed herewith and marked as Annexure “A” to this Petition.
The Petitioner states that, It was brought to the notice of the President YAI, that a few yachtspersons who had participated in overseas events, during 2004 - 2005, had allegedly submitted false bills and supporting documents and thus claimed excess funds from the Ministry of Youth Affairs & Sports, Government of India, through the YAI.

4.2. The Petitioner states that, accordingly, the Indian Navy conducted an enquiry to ascertain the facts and determine the total amount misappropriated, so that necessary action could be initiated to punish the guilty and the excess money claimed by submission of false bills by them could be refunded to the Ministry of Youth Affairs & Sports, Government of India. The Petitioner further states that, It was established that some of the yacht persons had indeed falsified bills, receipts and other supporting documents and claimed excess funds. A copy of the report dated 28/11/2005 submitted by Captain Rajesh Sarin to the Honorary Secretary General is annexed herewith and marked as Annexure “B” to this Petition.
The Petitioner states that, it can be noted that while the investigation / inquiry were conducted most of those who had submitted false accounts were serving with either the Indian Navy / Indian Army and once it was established that they were guilty of misappropriation of Government funds, no action was initiated to punish the guilty and for unknown reasons token sums were recovered and deposited with the Ministry of Youth Affairs and Sports, Government of India in late 2011. A copy of the YAI letter dated 22/11/2011 is annexed herewith and marked as Annexure “C” to this Petition.

4.3. The Petitioner further states that, those found guilty of embezzlement were quietly let off and Captain Homi Motivala, Captain Arvind Raghuwanshi and Lt Col Gautama Dutta resigned from the armed forces, without any action being taken against them. The Petitioner states that, it is pertinent to mention that when the enquiry was being conducted by Captain Rajesh Sarin, the then President of the YAI and Chief of the Naval Staff had appointed Captain Monty Khanna as the Secretary General of the YAI. It was during his tenure that the necessary actions on the guilty had to be initiated, however, he manipulated the system in such a manner that all those found guilty were permitted to get away. The same officer, who is now promoted to the rank of Rear Admiral, has once again been appointed as the Secretary General. This is in utter disrespect of the high standards of morality that should be exercised by the Indian Armed Forces and action needs to be forthwith taken on the guilty and the YAI Secretary.

4.4 The Petitioner further states that, some of the yachtspersons are operating bank accounts in foreign countries. It is pertinent to mention that no individual is permitted to open a bank account outside India without the approval of the Reserve Bank of India, however, despite knowing the rules no action was ever initiated against such officers by the administrators of the YAI. Several of the active defense personnel and participating in government funded sports events have been fraudulently claiming pension from the ministry of sports and youth affairs since 1998 despite being actively participating and claiming sports prize. The Petitioner states that, YAI had recommended Captain Homi Motivala for the cash award, for coaching sailors, who had won a Gold Medal at the World Championship. This bogus claim of coaching was refuted by some members of the YAI and when it was established that the claim had been irregularly made, Captain Motivala, was asked to donate Rs. 7.50 lakhs to the YAI and no further action was ever taken. In addition, Captain Motivala was recommended for award of the Dronacharya Award which was conferred by the Government of India in 2003. The Petitioner states that, it is pertinent to mention that when it was found that he was not eligible for the cash award or conferment of National honor, why no action was ever taken to revoke these awards and even today these officers get their monthly pension for cheating. A xerox copy an email dated 03/05/2004 from Commodore S. K. Mongia to Admiral Madhvendra Singh describing aforesaid illegal activities is annexed herewith and marked as Annexure “D” to this Petition.

4.5 The Petitioner states that, Property of the Indian Navy is being commercially utilized by a Private Limited Company which has been registered with the address of Indian Naval Waterman Ship Training Centre, Colaba, Mumbai. Commander R Mahesh,a serving Naval Officer, is one of the Board of Directors of this Private Limited Company. This is against all rules of the Armed Forces. How can pvt ltd company operate from defence property? A copy of the incorporation certificate and PAN CARD of the said company is annexed herewith and marked as Annexure “E” to this Petition.

The Petitioner states that, there was a time when the citizens of India, our great country used to look at the officers of the armed forces with great respect due to their dedication to this country and for their willingness to sacrifice their lives to protect the country. However the incidents highlighted above, have tarnished the image of the armed forces. The xerox copies of the news paper reports regarding the scam committed by the Respondents Nos. 5 to 7 are annexed herewith and marked Annexure “F” to this petition.

4.6. The Petitioner states that, Lt Col Gautam Dutta has been found guilty of several financial irregularities in the Army Court of Inquiry but his father Maj Gen S Dutta threatened and pressurized the enquiry officer. Lt Col Gautam Dutta quietly resigned from the Army to escape punishment and set up Marine Solutions Pvt Ltd to import luxury yachts for the rich and famous. The Petitioner states that at the behest of Respondents Nos. 18 to 19, 120 feet luxury yacht TIAN was imported by marine solutions by fraud to cheat the customs of import levies. The xerox Copy of the notice u/s. 124 of the Customs Act issued by the Commissioner of Customs (Imports) in this matter is annexed herewith and marked as Annexure “G” to this Petition.

TIAN was impounded by the Customs and it was given provisional release restricting the movement of the TIAN yacht. TIAN commander captain Homi Motivala who also resigned from the Navy because of an enquiry into financial irregularities and got Dronacharya award on bogus claims has been filing false TIAN YACHT MOVEMENT REPORTS with the Customs. TIAN is not supposed to leave Mumbai harbour without customs approval but the Goa Port Master and Harbor Master reports show that TIAN has been in Goa Panaji port regularly. Commander Homi Motivala has submitted passenger and cargo manifest of TIAN yacht with Goa Port Authority at the same time the Customs Fortnightly Movement reports shows TIAN is in Mumbai harbor. The Petitioner states that, TIAN is a Pleasure Yacht from Ferretti, Italy and cannot be used for any other purpose except for passenger transport but the Cargo manifest submitted with the Panaji Port reveals Iron Ore cargo on TIAN. After inflatable dinghy-borne terrorists laid siege to Mumbai in the country’s worst terror attack four years ago, security agencies and politicians both at the Centre and State had spoken of improving coastal security. Four years later little seems to have changed. The xerox copies of Detention Memo, Port Clearances, Vessel Profile, Provisional Release Letter are annexed herewith and marked as Annexure “H Coll.” to this Petition.

4.7 The Petitioner states that, Marine Solutions also operates an illegal party barge ISOLA at the restricted Mora coast, Uran. ISOLA was originally constructed as a dumb service pontoon meant for transportation of waste and scraps from ship to shore and was registered as DUMB SERVICE PONTOON PIT STOP at KALYAN in 2009 but has been operating as a luxury floating hotel ISOLA from 2010 onwards by Lt Col Gautam Dutta and his father Maj Gen S Dutta without permission or approvals from Mumbai Port Trust, Mercantile Marine Department of the Shipping Ministry, Coast Guard, Navy and the local authorities like the Maharashtra Maritime Board. ISOLA is frequented by top business corporates and bureaucrats with music and free flowing liquor on the high seas posing grave security threat and risk to the shipping traffic and underground power and data cables linking the commercial capital Mumbai to the financial world centers viz. Hong Kong, Singapore, London and New York. All relevant documents are annexed herewith and marked as Annexure “I” to this Petition.

....

:: SYNOPSIS ::

Year 2003:

Captain Motivala was recommended for award of the Dronacharya Award which was conferred by the Government of India.

03/05/2004:
Commodore S. K. Mongia writes to Admiral Madhvendra Singh describing the illegal activities of the Respondents Nos. 5 to 7.

June 2005:
The Honorary Secretary General of the YAI had reported cases of misappropriation of Government funds by some serving / retired armed forces personnel. It was established that some of the yacht persons had indeed falsified bills, receipts and other supporting documents and claimed excess funds.
YAI had recommended Captain Homi Motivala for the cash/Dronacharya award, for coaching sailors, who had won a Gold Medal at the World Championship.This bogus claim of coaching was refuted by some members of the YAI and when it was established that the claim had been irregularly made, Captain Motivala, was asked to donate Rs. 7.50 lakhs to the YAI.

2009-10:
Property of the Indian Navy is being commercially utilized by a Private Limited Company which has been registered by the Respondents Nos. 5 to 7 with the address of Indian Naval Waterman Ship Training Centre, Colaba, Mumbai. Commander R Mahesh,a serving Naval Officer, is one of the Board of Directors of this Private Limited Company. This is against all rules of the Armed Forces. How can pvt ltd company operate from defence property?

22/11/2011:
While the investigation / inquiry were conducted most of those who had submitted false accounts were serving with either the Indian Navy / Indian Army and once it was established that they were guilty of misappropriation of Government funds, no action was initiated to punish the guilty and for unknown reasons token sums were recovered and deposited with the Ministry of Youth Affairs and Sports.

Year 2011 :
Lt Col Gautam Dutta (R.No.7) quietly resigned from the Army to escape punishment and set up Marine Solutions Pvt Ltd to import luxury yachts for the rich and famous. At the behest of Respondents Nos. 18 to 19, 120 feet luxury yacht TIAN was imported by Marine solutions by fraud to cheat the customs of import levies. A notice u/s. 124 of the Customs Act was issued by the Commissioner of Customs (Imports) in this matter.

TIAN was impounded by the Customs and it was given provisional release restricting the movement of the TIAN yacht. TIAN commander captain Homi Motivala who also resigned from the Navy because of an enquiry into financial irregularities and got Dronacharya award on bogus claims has been filing false TIAN YACHT MOVEMENT REPORTS with the Customs. TIAN is not supposed to leave Mumbai harbour without customs approval but the Goa Port Master and Harbor Master reports show that TIAN has been in Goa Panaji port regularly. Commander Homi Motivala has submitted passenger and cargo manifest of TIAN yacht with Goa Port Authority at the same time the Customs Fortnightly Movement reports shows TIAN is in Mumbai harbor. The Petitioner states that, TIAN is a Pleasure Yacht from Ferretti, Italy and cannot be used for any other purpose except for passenger transport but the Cargo manifest submitted with the Panaji Port reveals Iron Ore cargo on TIAN. After inflatable dinghy-borne terrorists laid siege to Mumbai in the country’s worst terror attack four years ago, security agencies and politicians both at the Centre and State had spoken of improving coastal security. Four years later little seems to have changed.

Marine Solutions also operates an illegal party barge ISOLA at the restricted Mora coast, Uran. ISOLA was originally constructed as a dumb service pontoon meant for transportation of waste and scraps from ship to shore and was registered as DUMB SERVICE PONTOON PIT STOP at KALYAN in 2009 but has been operating as a luxury floating hotel ISOLA from 2010 onwards by Lt Col Gautam Dutta and his father Maj Gen S Dutta without permission or approvals from Mumbai Port Trust, Mercantile Marine Department of the Shipping Ministry, Coast Guard, Navy and the local authorities like the Maharashtra Maritime Board. ISOLA is frequented by top business corporate and bureaucrats with music and free flowing liquor on the high seas posing grave security threat and risk to the shipping traffic and underground power and data cables linking the commercial capital Mumbai to the financial world centers viz. Hong Kong, Singapore, London and New York.

 

Published on Leave a comment on Untracable communications beyond the reach of RTI

11 June 2012, Mumbai: This isn’t about Ratnakar Gaikwad, who was sworn in as Chief Information Commissioner of Maharashtra last Friday in the teeth of widespread opposition from RTI activists. This is about the decision-making environment in Mantralaya, MMRDA and many other government offices. It is about how government documents are nowadays like burqas, concealing the real decision-making process and often making the RTI process infructuous.Ratnakar Gaikwad’s correspondence with a chief of Western Naval Command shows how, when he was head of MMRDA, he did not even reply for over 60 days. And then, when he did reply, our new Chief Information Commissioner casually flung aside a plea for basic information by a top naval officer placed three levels below the President of India, Commander-in-Chief of the Indian Armed Forces. This article is about the real nature of government decision-making, and about how CM Prithviraj Chavan has strategically positioned Ratnakar Gaikwad in the Information Commission to ensure that the burqas of Mantralaya and MMRDA are not lifted by RTI activists.

 

Accountable and transparent governance demands that every decision must be properly minuted and documented. To maintain system integrity in the administration, every decision must leave clear footprints on paper. But are ministers and bureaucrats leaving an official paper trail? No.

 

DECISION-MAKING IS NOT REVEALED IN DOCUMENTS AND FILE-NOTINGS. Often, decisions made in unofficial ways are clothed in post-facto justifications that are written down to create a semblance of legitimacy. This creates a “black administration” or parallel administration in Maharashtra. (Yes, this is happening in other states and Govt. of India also.)

 

TEN METHODS OF “BLACK” DECISION-MAKING:

 

1)       POLITICAL PARTY BOSSES, GODFATHERS & OTHER DECISION-MAKERS decide selections, permissions, award of major contracts, land allotments etc. Decisions of ministers are actually the decisions of their party bosses, and bureaucrats’ decisions are proxy-decisions of political godfathers who are not connected to the concerned department. Can any RTI activist get minutes of meetings held in the political party offices, or in the air-conditioned cars of party bosses while driving between venues? The answer is: No. Even if the agenda and minutes are kept in party offices, these are outside the purview of the RTI Act.

 

2)      STICKY-NOTES AND LITTLE PAPER CHITS go from hand to hand. These are not filed, but discarded in the rubbish. Meetings and decisions happen at several venues around Mumbai and also Nagpur e.g. Mantralaya and New Administration Building at Nariman Point, MCGM headquarters in Fort, MMRDA headquarters at Bandra, Chief Minister’s bungalow and Sahyadri Guest House at Malabar Hill, and at similar venues in Nagpur. Can any RTI activist ever get access to all the chits of paper that are swept out in the rubbish? If an activist gets them, can he make sense of them? And if he makes sense, can he get such chits admitted as evidence by a law-enforcement agency or a court of law? Next to impossible.

 

3)      SMALL NOTEBOOKS OF STENOGRAPHERS & SECRETARIES who sit beside ministers etc. contain scribbled shorthand messages. Notebooks are not official government stationery, and much of the government staff is on contract – here today, gone tomorrow. Quite often, big businessmen who are trying to get their work done at Mantralaya are told to be in touch with the PAs rather than the ministers and bureaucrats. Has any RTI activist got access to such notepads? Can he? Very difficult. But that is often the only place where key decisions are noted.

 

4)      EMAILS, SMS, MMS & PHONE CALLS go between ministers, bureaucrats, government officials, leading businessmen and celebrity fixers (more about this later). Although some landlines and mobiles are paid for by the government, important calls are made on private lines. For instance, if CM Prithviraj Chavan communicates with Anil Ambani on a mobile phone that is registered in the name of his daughter, can you get the call records using RTI? No. Ideally, every communication of ministers and bureaucrats – whether formal or personal – must be recorded. But the reality is that maximum communications are unrecorded and unavailable for scrutiny. Although the RTI Act defines electronic exchange of data and communication as “information”, one is yet to meet a single RTI activist who got access to electronic communications between ministers, bureaucrats and stakeholders like companies engaged in PPP projects. As a rule, gov.in email ids are dead-letter-boxes; ministers and government officials use gmail or yahoo addresses. RTI activists are not asking for call-records, SMSes, recordings of telephone conversations and emails.

 

5)      MEETINGS IN CORRIDORS, CARS etc have no appointments, no agenda, no minutes and no records. A small number of these may be revealed by security cameras. Has any RTI activist got the CDs of security camera footage that shows, say, Sharad Pawar and IRB Infrastructure Developers as they get into a car together? Unlikely. Even if one gets the security camera CD, what will it prove? Because it will have no audio.

 

6)      ON FLIGHTS AND IN HOTELS ABROAD OR IN INDIA, our decision-makers have lengthy discussions without anybody monitoring them. Such meetings happen in Dubai, Mauritius, Malaysia or on the sidelines of IPL matches in India. People like Vijay Mallya, Mukesh Ambani and Subrata Roy Sahara or their trusted representatives participate in them. Is any RTI activist tracking the meetings that our ministers and bureaucrats have during their Indian tours, leave alone foreign tours? No.

 

7)      HARD DISKS OF COMPUTERS & LAPTOPS used by ministers and bureaucrats, and their assistants contain lots of information. They may be messaging and emailing with special NIC software that is encrypted. Has any RTI activist asked for a full copy of all the computer drives of, say, the Maharashtra’s Revenue Minister’s office? No. Even CAG doesn’t look at computers.

 

8)      PERSONAL MESSENGERS including peons, junior staff, political party-workers, Mantralaya-frequenters, journalists like Barkha Dutt, Vir Sanghvi and fixers like Neera Radia -- form the communication channel between political bosses and private entities. Some visitors are recorded in gate registers that may be accessed under RTI, but not all. Peons, junior staff, drivers, cops etc. slip in and out of offices, often unrecorded and unnoticed.

 

9)      FAMILY MEMBERS of ministers and bureaucrats are not all leading private or professional lives. Some are active participants in decision-making. Bribes are given through family members and their trusts; a favourite route is for them to purchase properties at a low price and then sell them back at a higher price, and pocket crores within a couple of years, during which the bribe-giver and bribe-taker are bound together in a relationship. Sons and daughters are awarded lucrative business contracts or seats on company board of directors. As family members are not under RTI, the meetings that they hold are difficult to track.

 

10)  CRICKET BODIES are being used by Sharad Pawar and Vilasrao Deshmukh to control government decisions and deliver money to foreign bank accounts, especially in tax haven countries. Politics, government, cricket and money mix freely at BCCI (Board of Control of Cricket in India) and MCA (Maharashtra Cricket Association). Cricket celebrities, including veterans like Sunil Gavaskar, travel to Dubai, Mauritius, South Africa and tax-haven countries many times a year. They meet with foreign companies that are part of mega-sized Public Private Partnership projects (PPP) such as Mumbai International Airport Limited. Cricket celebrities visit corporate offices like Sahara India and Kingfisher, as well as various government offices, without coming under a scanner. They are couriers for both money and decisions that are made elsewhere. Corporate money flows through BCCI and MCA without questions being raised, and these organizations are kept out of the scope of Right to Information. IPL (Indian Premier League) celebrities like Shah Rukh Khan and Shilpa Shetty are also part of this circuit. [Note: If this sounds like a far-fetched theory, ask why political heavyweights like Sharad Pawar and Vilasrao Deshmukh invest so much of their effort to head these sporting bodies!]

 

Given this background of toxic decision-making in Maharashtra government, take another look at Ratnakar Gaikwad’s communications with Western Naval Command, which relates to Adarsh building. Download this file:http://tinyurl.com/Adarsh-OC-Ratnakar-Gaikwad-red

 

This PDF file contains three letters:

  • The first two pages are a plea for information from Western Naval Command to Chief Secretary, Municipal Commissioner and Principal Secretary of Urban Development Department (UDD) on 25 June 2010.
  • The third page is a covering letter from UDD, forwarding Western Naval Command’s letter to (then) MMRDA Chief Ratnakar Gaikwad on 30 August 2010.
  • The last page is Ratnakar Gaikwad’s amazing reply to Western Naval Command on 29 September 2010.

 

HOW GAIKWAD DENIED INFORMATION TO NAVY CHIEF

 

ON 25 JUNE 2010, the Flag Officer Commanding-in-Chief Western Naval Command (FOCIC WNC), wrote to Maharashtra’s Chief Secretary, Municipal Commissioner of Greater Mumbai and Principal Secretary of Urban Development Department. It was a reminder, as a similar letter had been written on 8 June 2010. (Bear in mind, FOCIC WNC is a very high office, third in line from President of India, who is Supreme Commander of the Armed Forces. While MMRDA is in charge of planning for the Mumbai Metropolitan Region, Western Naval Command is in charge of coastal security of four states, namely Gujarat, Maharashtra, Goa and Karnataka.)

 

This letter raised “serious concern with regard to the construction of a building by a private housing society in the vicinity of defense installations at Colaba Defence Station, Mumbai, and the necessity for screening of the allottees from the security point of view”. Mentioning the increased threat perception post 26/11 and asking for the list of allottees, FOCIC WNC said, “It is of the utmost urgency from the point of view of security… that necessary directives under Section 154 of the MRTP Act 1966 be immediately issued by the Government of Maharashtra to the Planning Authority not to grant any Occupation Certificate, partial or otherwise whatsoever, to the said building/society, which is in the vicinity of the WNC Defence installations /Colaba Defence Station till the desired information is provided by them, and vetted by this Headquarters. You are requested to kindly take action on the aforesaid, failing which HQ WNC would be constrained to take legal recourse to legal proceedings.”

 

Bear in mind, Western Naval Command did not ask the government to refuse OC to Adarsh; they only asked for issue of OC after the information about Adarsh allottees was provided to them, vetted by them and approved by them. It was a reasonable demand. It is a matter of national shame that FOCIC WNC wrote, “…all efforts to procure the requisite information from the Deputy Registrar “A” Ward, Registrar of Societies, Mumbai, and also from the Housing Society itself, failed as neither of them forwarded the desired information as per the format forwarded to them.”

 

ON 30 AUGUST 2010, this letter was forwarded without written instructions to Ratnakar Gaikwad, Metropolitan Commissioner, MMRDA. (See page 3 of PDF file.) Mantralaya (i.e. the Chief Secretary, Chief Minister Ashok Chavan or Principal Secretary UDD) could have replied directly to FOCIC WNC, or they could have issued directions to Ratnakar Gaikwad. But they did not, because they wanted Ratnakar Gaikwad to do a dirty job. (And yes, he did the dirty job and came out smelling like roses! God alone knows how many top people he shielded by doing this, and how many people owe him a debt of lifelong gratitude.)

 

ON 29 SEPTEMBER, Ratnakar Gaikwad delivered a killing stroke to Western Naval Command. Rendering the navy’s plea for information completely infructuous, Ratnakar Gaikwad stated in his letter that HE HAD ISSUED THE OC ON 16 SEPTEMBER i.e. 13 days earlier, despite having received their forwarded letters several times. The basis of this decision to give the OC unilaterally, without consulting the most important stakeholder i.e. Western Naval Command, was given as a letter written by the secretary of Adarsh Society. Let me repeat: The word of an ordinary building secretary – representing a very private interest – was Ratnakar Gaikwad’s justification for acting against the word of a defense chief, and denying him information about who was going to live in the building. Gaikwad’s letter went on to conclude that if the defense chief had any security concerns, he should now approach the police commissioner.

 

In other words, go to hell. Desi bhasha mein bole toh: “Thenga! Security concerns gaye bhaad mein! Ja ukhaad le jo ukhaadna hai!”

 

TEXT OF GAIKWAD’S AMAZING REPLY TO NAVY CHIEF

 

“Sir, please refer to your above cited letters. In this regard, secretary of the society has written a letter to MMRDA in which it is stated that ‘It is reliably learnt that Naval Authorities have also written to your office regarding the antecedents of members of our Society. In this context, I would like to bring it on record for your kind information that the society consists of members from Army, Navy, Government of India Officers from IAS, IPS, IFS, IRS and other Government Officers. Our members are including Ex Chief of Naval Staff, Ex Flag Officer Commanding in Chief, two formal Chief of Army Staff and other senior officers from Army, Navy, Defence Estates etc. The Society also have Hon’ble Members of Parliament, State Assembly besides senior people who held position of Union / State Cabinet Ministers and Speaker of Maharashtra Assembly. It is also brought on the record that the land in question is State Government land allotted to the Society by the State Government and Membership have been approved by the Government of Maharashtra/Collector Mumbai according to the Government Resolution in force and antecedents of all the members have been verified and approved by the government prior to allotment of membership. In the light of above, any further verification of antecedents of members by the navy appears to be overstepping the right of propriety vested in the Government of Maharashtra and Collector Mumbai City, who have verified and approved the names.’

 

“IN VIEW OF THE ABOVE, IT IS FELT THAT AFTER COMPLETION OF THE BUILDING, BASIC ISSUES MAY NOT BE RAISED (emphasis supplied). If there is any reasonable apprehensive (sic) about the members of the society from the security point of view, you may refer the matter to the appropriate authority such as Commissioner of Police, Mumbai. MMRDA has issued the Occupancy Certificate to the Adarsh Society on 16/9/2010.

Yours faithfully, Ratnakar Gaikwad, Metropolitan Commissioner.”

 

IS THIS HOW IT REALLY HAPPENED?

 

Is it likely that Metropolitan Commissioner Ratnakar Gaikwad – a seasoned bureaucrat and head of MMR’s planning authority -- dismissed the safety concerns of a high-ranking naval officer based on a letter from a mere building secretary? Was it his own decision as Metropolitan Commissioner to give Adarsh the OC? Why was he in such a hurry to give the OC that he actually gave it first, and then wrote a letter to the Navy chief giving a lame justification?

 

This amazing letter leads you to the conclusion that Ratnakar Gaikwad received orders by non-official channels. For his obedience and cleverness in providing a cover for the state government, he was later rewarded with the post of Chief Secretary. And now, to cover up the documents of Mantralaya and MMRDA, Ratnakar Gaikwad has been made the Chief Information Commissioner. Chief Information Commissioner is the only one who hears RTI second appeals relating to Mantralaya and MMRDA. Former Metropolitan Commissioner Suresh Joshi was also made the Chief Information Commissioner despite being severely hearing-impaired, and coincidentally, he too had played a role in Adarsh. (Not to mention suspended State Information Commissioner Ramanand Tiwari, a former UDD Secretary, who recently spent 60 days in CBI custody for his role in Adarsh.)

 

GAIKWAD’S KNOWLEDGE OF ADARSH CONSPIRACY VS. TOTAL INNOCENCE

 

Firstly, Ratnakar Gaikwad cannot deny his knowledge of the Adarsh conspiracy in Mantralaya, involving at least 7-8 top bureaucrats and numerous top politicians, including Chief Minister Ashol Chavan. Everybody knew; and as MMRDA chief, it was Ratnakar Gaikwad’s job to know. Adarsh had been 10 years in the making, and a red flag had been raised in newspaper reports as early as in 2003. Besides being  in the Indian Navy’s sensitive zone and in the Coastal Regulation Zone, MMRDA’s Development Plan had been modified to accommodate this 31-story building Coastal Regulation Zone. As MMRDA chief, it was Gaikwad’s job to have his ears to the ground and know everything there is to know about this building, including the security concerns, and the conspiracy and the cover-ups surrounding it. So Ratnakar Gaikwad cannot claim that he gave the Occupation Certificate innocently. Therefore, the letter that he wrote to Western Naval Command is completely disingenuous; it is a total cover-up.

 

Secondly, Gaikwad’s letter acknowledges that he had received forwards of the Navy chief’s letter on 28/7/2010, 1/9/2010 and 14/9/2010. Again, on 15/9/2010, he received a letter from the Navy directly addressed to him. Why did he not reply to all these letters until it was too late for the Navy to do anything about it, i.e. 29/9/2010, two weeks after he gave the OC to Adarsh? The gap between MMRDA receiving the first letter and its reply to the Navy was over 60 days. (The information that the Navy was requesting was never given by the Cooperatives Registrar, Chief Secretary, UDD, Municipal Commissioner, MMRDA; maybe they might have got it if they had filed an RTI application instead of writing letters!)

 

Finally, Ratnakar Gaikwad must have received phone calls from the Chief Secretary, Chief Minister, Municipal Commissioner, and Principal Secretary UDD soon after the Navy’s letter reached them on 8 June and 25 June 2010 – because it concerned issuing the occupation certificate, which was his turf. In fact, the letter must have been scanned and emailed to him. (The top brass must surely be emailing and phoning one another several times every week or even every day on an ongoing basis!) The Naval chief had threatened them with legal proceedings; would anybody take such a threat lightly? These people must have held many closed-door meetings that were not minuted or recorded.

 

There are surely dozens of emails, phone calls, SMSes and meetings that are not on record. So, Ratnakar Gaikwad was definitely not acting all alone in perfect innocence and good faith as he put the proverbial cherry – the occupancy certificate – on Adarsh building, the towering cake of deceit. But that is how they made it look.

 

And now Prithviraj Chavan and Ratnakar Gaikwad want us to believe that it was incidental that the post of Chief Information Commissioner in Maharashtra lay vacant for 10 months, while Gaikwad finished his term as Chief Secretary. They want us to believe that it was coincidence that the selection committee meeting was held three days after Gaikwad’s retirement from IAS. They want us to believe Ratnakar Gaikwad is the best man for the job.

 

Last but not least, they want us to believe that Chief SIC Ratnakar Gaikwad really cares about the rising pendency at Maharashtra State Information Commission, and that he will help the RTI applicant and the common man make this government transparent and accountable.

 

Prithviraj Sir, Ratnakar Sir, we are finding these things a little bit difficult to believe, No? When you will be giving appointment, Sir, for discussing all these things in the open? Lot of people are eagerly waiting, Sir.

 

Warm Regards,

Krishnaraj Rao

98215 88114

thebravepedestrian@gmail.com

 

PS: We have already sought an appointment with CIC Ratnakar Gaikwad to discuss these and other “allegations” with documents in hand. We have asked for an open-door meeting, where media and activists will be free to watch and ask questions. Hopefully, our new CIC will not disappoint.

4

Published on 4 Comments on SailGate: The UnRomantic Gift

As the fairy tale goes, First lady of Mumbai, Tina had always wanted to have a yacht. Husband Anil Ambani got her a dream-boat. A 400 crore rupee one! Would be nice, if true. But you know how newspapers exaggerate. Here's a quote:

Tian was built in Genoa, Italy. It is about 34 metres long and cost around Euro 34 million to build. According to sources in the yacht building industry, the cost of each running metre of luxury yachts is Euro one million. The final cost to Anil Ambani could be around Rs 400 crore, inclusive of customs and excise duties and refurbishing, add sources.

Not true. For reasons unknown, it didn't quite work out like that. The cost wasn't inclusive of customs and excise duties, but it still was the total cost. Do the math. But this is one of the less fun stories. Sanjay Prasad, Appraising Officer of the Central Intelligence Unit wrote a love letter.

I quote:

Whereas there are reasons to believe that a brand new Motor Yacht TIAN (Pleasure Yacht), imported vide IGM No. 29429 dated 22.10.2008 in the guise of "Used Motor Yacht Type CRN 112/18 Named TIAN", was found parked at Off Gateway and is therefore liable for confiscation under the provisions of Customs Act 1962.

This wasn't reported, I think. No results in news. Moneycontrol.com had written about it, but the article is currently empty. Zero. But the detention memo exists. It is the fairytale that doesn't. I would like to imagine a romantic explanation that after building their charming home, money was tight, etc,  but here's the deal. How do you commission a specially designed second hand yacht?

And of course the ungraceful question of the yacht being named after TIna and ANil Ambani = TIAN - get it? So I find it tough to believe he got his wife  a second hand boat and pretended to the media that it was new. I don't like to make assumptions about people's poverty, but Mumbai's poor little rich guy is really tough to imagine as someone who "can't afford". So, the unpalatable reality. The papers were misled. Why? Consider this:

TIAN is 112 feet yacht owned by ANIL and TINA AMBANI imported from ITALY by MARINE SOLUTIONS for AMMOLITE HOLDINGS. It was declared as a transshipment cargo (TP) – on which duty is not paid – and that it was a used and not a new yacht. The yacht came into India on another cargo and according to the yachts documents, was headed to Colombo. The yacht was brought to India and its possession was given to ADAG by way of charter from a foreign company and was declared as TP cargo. Payments for TIAN was made by made by Gateway Net Trading, another ADAG associate of Reliance Communications. Both these companies are in non-taxable jurisdictions. The yacht attracts 35% import duty charge on the boat cost, which would still add up to Rs 94.5 crores (70 + 24.5).

Tian is a Custom line 112 Ferretti yacht currently anchored off Oyster rocks near Gateway of India. The boat has been named Tian based on the initials of ‘Tina & Anil’ and it is a fully equipped with the 5 cabins (10berths) & 6 bathrooms and is considered the Rolls Royce on waters. TIAN TOO is also owned by ANIL and TINA AMBANI. It is 35 feet FERRETTI and was imported by MARINE SOLUTIONS.

Customs gave provisional release of "pleasure motor yacht - TIAN" after Reliance ADAG Sr VP Hari Nair gave an undertaking for safe custody of the seized luxury yacht TIAN to the president of India. The undertaking required submission of fortnightly movement report of TIAN to the Customs but the Goa Port office records of passenger and cargo manifest show that the pleasure yacht TIAN was in Panjim with crew of 9 and cargo of Iron Ore while the fortnightly movement report claims the yacht is at anchorage off Oyster Rock, Colaba, Mumbai. A pleasure craft is permitted to carry only passengers but TIAN had declared Iron Ore cargo probably to pay for the rising cost of fuel from Mumbai - Goa - Mumbai.

Interestingly  Maj Gen (retd) S Dutta is presently a senior vice president of Reliance ADAG that owns TIAN and TIAN -2 while his son Lt Colonel Gautam Dutta is owner of Marine Solutions that had imported the custom line FERRATTI luxury yacht TIAN and TIAN TOO for Anil and Tina Ambani.

Quick Facts about TIAN

1. Yacht Purchased in Oct 08 by Ammolite Holdings.

2. The yacht seized by Customs in Feb of 2009.

3. Rs 25 crores paid to customs as deposit for repossession of the yacht which was
denied.

4. Ammolite Holdings (ADAG group co) filed the petition in Bombay High Court
challenging seizure of the yacht.

5. Assistant Commissioner of Customs S R Vichare stated that the yacht had
violated Section 111(m) of the Customs Act, hence is liable for confiscation.

6. ADAG claiming the boat to be a foreign flag boat, hence does not require any
import duty to be paid in India.

“The petitioner has indulged in smuggling by violating the provisions of the Act and in league with others to evade duties,” Assistant Commissioner of Customs SR Vichare had stated in reply to the petition.