Tuesday 3 April 2007 by Manthan Adhyayan Kendra
The Public Accounts Committee (2006-07) of the Chattisgadh Assembly, in its 64th Report, tabled on 16th March 2007 has recommended that the Agreement and Lease Deed between Madhya Pradesh Audhyogik Kendra Vikas Nigam Limited (MPAKVN or MP Industrial Centre Development Corporation Ltd, now Chattisgadh Rajya Audhyogik Vikas Nigam CRAVN) and Radius Water Limited for the Sheonath Water Supply BOT project must be cancelled within one week of tabling of the Report and that all the assets and the ownership of the water supply project must be taken back by CRAVN.
It has also recommended registration of a First Information Report (FIR) and initiation of criminal proceedings against the then Managing Directors of MPAKVN (Raipur) and Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC) and the Chief Engineer of MPSIDC for conspiracy to damage the interests of the Government and transferring to a private agency Government properties through manipulation and unlawful forgery of documents. It has also recommended registration of an offence against the main post-holder of Radius Water Limited for participation in this above criminal conspiracy and gaining profit by causing harm to government properties.
So far, there is no reaction from the Chattisgadh Government.
Background
It may be recollected that in 2001, Radius Water Limited, a local private company was given a concession to build a dam across Sheonath river, for supplying water to the industrial estate of Borai, near Durg city in Chattisgadh on Build-Own-Operate basis. Once the contract was signed, the owner asserted his rights to the 23.6 km water reservoir, banned the locals from using the waters, and was supported by the state in this. The villagers who used to fish in the river, who used the river ghats for bathing, who took water from the river for growing vegetables and small crops and depended on the river for other needs lost access to the river. Intense local struggles, supported by nation-wide campaigns challenged this.
The project was also criticised widely for its extremely skewed terms unduly favouring the private party. Among others, its take-or-pay clause, that required the Chattisgadh Government to pay for 4 MLD of water regardless that demand was less than this, was seen as causing severe losses to the Government since the inception of the project till date as the demand for water has been far lower.
It was the wide criticism of the project in the media during December 2002 that prompted the Public Accounts Committee, headed in 2005-6 by Dr. Ramchandra Singhdeo and in 2006-07 by Shri Ravindra Choube to take cognisance of the matter, and in its meeting of 6 January 2003, it decided to look into the project. It submitted a note to the Speaker of the House on 9 January 2007 requesting permission to examine the matter. It proceeded with the enquiry on getting permission from the Speaker.
Findings and Recommendations
Some of the key Findings and Recommendations of the Public Accounts Committee Report are given below. These are summarised and translated from the original Hindi. The original Hindi Findings and Recommendations (Pages 56–63 of the Report) can be found at http://www.manthan-india.org/article24.html
1. The Committee deems it appropriate to mention that the department did not take any interest in making available to it relevant documents during the process of the inquiry. On repeatedly asking, incomplete and differing documents were made available to the Committee.
2. From the reports and evidence presented to the Committee, it is the opinion of the committee that the original objectives and rationale based on which it had been decided to start a water supply project as a joint venture (with HEG), were sidelined and the Managing Directors of MPSIDC and MPAKVN (Raipur), through a deliberate and well thought-out strategy forced HEG out of the picture for furthering their personal interests.
3. Committee wishes to mention that the biggest consumer of water in the industrial estate was HEG and that is why it was interested in the project. The original agreement with HEG was also relatively favourable to the Government. In spite of this, by not finalizing the beneficial project with HEG but rather reaching an agreement on unfavourable terms with a private agency with no previous experience of water supply projects, in violation of rules completely destroyed the objectives and rationale of the project. As a result, the Government had to bear losses from day one of the project.
4. The MPAKVN (Raipur) did not have authority to hand over to a private company such an important responsibility as water supply. Further, to hand over to the private company assets worth over Rs. 5 crores (50 million) on the token rate of Rs. 1 (Rs. One!) without the permission of the State Government was, in the opinion of the Committee, a well thought-out conspiracy to cause loss to the Government.
5. How did a completely different company come into the picture in place of the earlier tendering company within a span of 24 hours? The Government failed to explain this to the Committee. The Committee considers this highly objectionable and considers it a criminal act leading to undesirable profits in violation of procedure.
6. The then Managing Director of MPAKVN, Shri G. S. Mishra, who signed the agreement with Radius Water Limited on behalf of MPAVKN overlooking all facts and keeping the Government in the dark has committed a criminal act.
7. The Agreement assures Radius Water Limited payment for minimum of 4 Million Litres water per day. It may be mentioned here that the demand of 4 MLD did not exist on the day of the agreement also and hence it was inappropriate to guarantee payments for a minimum of 4 MLD. According to the facts presented in the Assembly in relation to Questions, the minimum demand was 1.14 MLD and the maximum demand was 2.4 MLD. Moreover, in case Radius Water Limited was not able to supply the minimum 4 MLD, then it was to be charged a penalty of Rs. 3000 per MLD deficit or Rs. 3 per 1000 Litres. However the rate that was being paid to the company was Rs. 12.60 per 1000 litres.
8. The Committee found that the MPAKVN (Raipur) has handed over completely for 20 years a natural resource of the villagers, namely the Sheonath river and land worth crores of rupees.
Note Prepared by
Manthan Adhyayan Kendra
April 3, 2007
For more information, you may also contact: Gautam Bandopadhyaya, Nadi Ghati Morcha at Raipur on 09826171304 or at nadi_ghati@yahoo.com