Marxists’ Own Bofors & CPM Incorporated (tehelka)
Sudhir Devadas
The Marxists' Own Bofors
The CBI is likely to chargesheet the CPM's Kerala state secretary Pinarayi Vijayan for helping a Canadian firm swindle public money worth almost Rs 400 crore
KA SHAJI
Thiruvananthapuram
The CBI probe into kickbacks received from Canadian firm SNC Lavalin, which was setting up a cancer hospital in Pinarayi's hometown Thalassery, is in its final phase, and Pinarayi could be interrogated any time.
The other man who returned to the Politburo along with Pinarayi — Chief Minister VS Achuthanandan — is relishing the chance to corner his rival. The state government has put it on record with the CBI that SNC Lavalin has swindled up to Rs
12.54 crore, collected from different overseas agencies. This amount is in addition to public money worth Rs 374.50 crore wasted by Lavalin in the name of carrying out repairs on a few hydel projects in Kerala. According to CBI sources, Pinarayi, as power minister from 1996 to 1998, had flouted norms in awarding contracts to Lavalin. Senior CBI officials told TEHELKA that the evidence against Pinarayi is damning and he is likely to be chargesheeted soon.
It was only a few weeks ago that then Home Secretary KK Vijayakumar informed the CBI team that Lavalin had cheated the state government of Rs 12.54 crore of the Rs 25.3crore collected for the cancer hospital.
Pinarayi hired senior Supreme Court lawyers when he appeared before the Kerala High Court and declared there was nothing irregular about the deal and the government had suffered no loss. But the court decided in favour of a CBI inquiry.
Controversy surrounded the Lavalin deal ever since it was signed in October 1996 by the EK Nayanar-led Left Front government in which Pinarayi was the power minister. Lavalin entered Kerala in 1995 by signing an MOU with the Kerala State Electricity Board, which appointed the firm as a consultant for modernising and replacing generators in three hydroelectric projects in Idukki district.
In February 1996, the contract was extended to include project supervision, technical assistance and sourcing of funds. The project was specified for completion within three years. The consultancy fee was set at Rs 20.31 crore.
The rot set in around October 1996 when the CPM returned to power. A highpowered official team led by Pinarayi visited Montreal to revise the Lavalin contract. The consultancy contract was expanded to include a supply contract for procuring equipment. The consultancy fee remained unaltered but an additional Rs 149.15 crore was committed for buying equipment. It may be mentioned that Lavalin itself did not manufacture any power equipment. The contract was tied to other deals. An accompanying grant for the Malabar Cancer Centre Hospital was negotiated. Lavalin commi tted itself to mobilising Rs 98.3 crore for the hospital.
S. Varadachari, then Principal Secretary (Finance) of the Kerala government, questioned the deal and called it a ploy to bypass accepted tendering norms. The signing of the contract was rushed through in 1997, ignoring the lower offer for the same job by the public sector Bharat Heavy Electricals Limited (BHEL).
Lavalin pledged to complete the cancer hospital within four years. By March 1998, Kerala's electricity board as well as the Cabinet had formally approved the deal, including the grant to the hospital. The recommendations of an experts' committee in favour of BHEL were ignored. After the renovation was done, not a single unit of additional power was generated. The imported equipment and technology was found unfit for the hydel projects.
By July 2005, the Congress was back in power. The Comptroller and Auditor-General (CAG) pointed out a serious breach of norms and undue haste in signing the deal. The CAG report stated that the deal caused a loss of Rs. 374.50 crore to the exchequer. In January 2006, the state Vigilance and Anti-Corruption Bureau ruled that the deal was out of order because no tenders had been invited. In February, the Vigilance Department recommended chargesheeting top officials.
IN MARCH 2006, a writ was filed in the High Court demanding a CBI inquiry. The Congress government in power decided to institute the inquiry. This was followed by the usual cover-ups. The Vigilance Department claimed a crucial file related to Pinarayi was missing. The SP who investigated the case went on long leave. Nevertheless, Vigilance Director Upendra Verma submitted an FIR without consulting the government. It was the last phase of the Congress-led government's tenure. The Left was expected to return to power. The Congress tried to transfer Verma. The Election Commission blocked the move because the model code of conduct was in force.
In July 2006, the CBI found a prima facie case of corruption and asked the state Vigilance Department to hand over concerned files. Recently, the CBI unearthed some crucial documents linking Pinarayi to the deal from the cancer centre, electricity board headquarters and state Secretariat. Home Minister Kodiyeri Balakrishnan, a Pinarayi loyalist, was an unofficial member of the electricity board when the deal was finalised. He is also on the board of the cancer hospital from which the grant money vanished. The cancer centre received less than Rs 9 crore.
Of the Rs 98.3 crore pledged to the hospital, Rs 12 crore was paid to Technikalia, a company in Chennai. Why was this company authorised to receive the grant? An account had been opened in the SBI's Thalasserry branch, where the hospital is located, to credit the grant. According to party sources, Achuthanandan had given a memorandum supported by documents to the party's central leadership regarding the involvement of his Politburo colleague in the deal.
Left Vs Left For Capital Gains
The party's organisational poll is all about who gets to control its business conglomerate. KA SHAJI reports
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EVEN HIS death was a political statement. Kerala's leading Left theoretician MN Vijayan, who earned the wrath of the state CPM leaders by exposing their ideological degeneration, died on October 3 addressing a press meet in which he reminded cadres that the country was greater than any individual. He suffered a stroke as he was uttering the words, "we will not allow the state to be misled or hijacked". His last words assume great significance given the current political scenario in the state where groups led by CPM state secretary Pinarayi Vijayan and Chief Minister VS Achuthanandan are pitted against each other in the organisational elections to gain control of the party's Rs 4,000-crore empire. The inner-party polls have already begun and have created the mood of an Assembly election in Kerala. Will Pinarayi retain control or will Achuthanandan make a comeback has become a topic of great debate in the state.
The first major instance was when party cadres burned a snake park at Pappinissery in Kannur to settle political scores. The issue gained national attention and though the CPM stood isolated, Vijayan was the only academic who supported the party. Vijayan took the same stand when CPM men hacked a BJP leader to death in front of the primary school students he taught. But Vijayan's tirade against some leaders who deviated from the fundamentals of Communism and accepted foreign funds with strings attached made him persona non grata for Pinarayi and his cronies. Vijayan's call for revolt against Pinarayi during the last organisational election had many takers but that failed to become a reality as money and muscle won over ideology. While the party is facing yet another major organisational poll, many feel Vijayan's last words will have an impact. Meanwhile, the rival groups care little for ideology and prefer "practical" ways to win the election. In Palakkad, alcohol was used to prevent a local leader from attending an election process. When he was in a drunken stupor, his rivals hijacked the proceedings. Attempts to use industrial groups to influence prominent local-level leaders with money are also going on unabated in Alappuzha and Thrissur districts. The winners have much to gain. After all, the CPM here is run like a corporation with its state secretary as the virtual CEO. No other party in Kerala owns as much land and property as the CPM. It has also diversified into hospital ventures, owns three satellite TV channels and runs the Desabhimani, one of the state's largest-circulated dailies. Flush with the success of its ventures, "reformists" in the party now plan to set up Information Technology (IT) parks and mega hypermarkets, the latter modelled on supermarkets in the West. Whoever said the comrades were insulated from market forces apparently got it wrong; in Kerala, at least, CPM Incorporated is marching ahead. But what has left die-hard supporters speechless is the CPM's foray into the amusement park business. People like MN Vijayan had criticised it but in vain. Initially, the party set up a cooperative society, the Malabar Tourism Development Cooperative Society, to execute the project. The plan was to mobilise funds from cooperative banks and financial institutions for the project. However, it ran into rough weather with the then Congress- led government dissolving the governing bodies of co-op banks and bringing them under its control. But work on the project is on at breakneck speed. A new outfit, the Malabar Pleasures Private Limited, has been registered and is promoted by a group led by the Kannur district party secretariat members. Funds for the channels didn't come only from pro-CPM outfits. When the party asked, even liquor barons were only too happy to get out their cheque books. MP Purushothaman, a Chennai-based liquor baron, bought Rs 25 lakh worth of shares. Further, non-resident Keralites are well-known as a source of the party's funds. Drunk on the success of its burgeoning empire, the Pinarayi Vijayan faction is planning more ventures. The pointsman: E. Narayanan, the brain behind the party's rubber co-op, Rubco. His latest venture is the newly floated Tellicherry Medical Foundation (TMFL). Rubco was one of Narayanan's first successes. Established in 1997, it now has annual sales of over Rs 450 crore and a staff of over 1,000. Located in the Marxist bastion of north Kannur, it manufactures a range of coir and rubber products. However, the UDF says Rubco availed of loans worth crores from CPM-controlled cooperative banks, violating norms, and made no repayments. So there is no real profit for the company, the UDF alleges. The CPM's mascot in Malabar is, of course, the 250-bed Tellicherry Cooperative Hospital. It has also set up an EMS Memorial Hospital at Perinthalmanna in Malappuram district. Three years ago, a 100-bed hospital, in the name of ex-party secretary AP Varkey, was opened in Ernakulam. While some oppose the party's involving itself in the service industry, sympathisers argue that the CPM had to change with the times. The new logic is that only then can it play a role in modern society. Therefore, they feel, there is no harm in the cadre exploiting unfolding opportunities in trade and commerce. But not everyone agrees. Asks Berlin Kunhananthan Nair, one of the old guard: "Do you think the emancipation of the working class will come through amusement parks and super-specialty hospitals?" This organisational poll will hopefully provide an answer to this. |
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Oct 20, 2007 |