Koda scam: Reveal the identities of bribe givers

The Rs 4000 crore bribe reportedly received by former Jharkhand Chief Minister Madhu Koda, who is currently under investigation by the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and Income Tax Department, confirms  the suspicion that most of the natural resources of the country are being handed over on a platter to select industrialists who illegally gratify the political establishment.

The Memorandum of Understandings (MoUs) entered into by the state (Jharkhand) will show that these are dictated by the industrialist to maximize their profits in a manner that neither the local residents nor the nation gains from it.

In this context, the vast number of power project MoUs signed for over 10,000 MW with the private sector (Jindals 2640 MW, Ispat 1980 MW, India Bulls 1320 MW, Lanco Infratech 2640 MW, Reliance Energy and ATEL for 100MW each) are based on allocation of coal mines of the state. Under the terms of the MoUs, the private developer will be obliged to sell only 25 percent of the power to the state and the rest will be sold as merchant (non-price cap) power. Usually the state has a right to 80 to 85 percent of power, in which the price of the fuel is a pass through. This is not the case with these projects.

Similarly, MoUs for 90 million tonnes of steel have been signed with the Mittals, Jindals and Essar, based on iron ore deposits of the state. Aditya Birla group has signed an MoU for a Rs 7800 crores aluminium smelter plant.

Jharkhand has 2 percent of India’s population but 40 percent of the total mineral resources. Forty percent of its population fall in the Schedule Caste and Schedule Tribe category. And most of these people live in abject poverty.

All the MoUs are based on expropriation of the tribals from their land and source of livelihood. The business agreements are motivated by profiteering by a handful of individuals and are bribe driven. It is not surprising then that a large number of poor people have embraced ultra Leftism as the only alternative to state tyranny.

The situation is no different from the “blood diamonds” in Africa where communities with physical access to rich natural resources are among the poorest.

To salvage the alarming situation the government should immediately take following steps:

  • The investigation agencies should also concentrate on the bribe givers and reveal their identities. The government and agencies should not act in a partisan manner (as they usually do) of revealing what is in their political interest and not in their economic interest. Is the government also culpable of bribe taking like Koda allegedly is?
  • All the MoUs signed by Koda should be canceled as they are anti-nation and anti-people. They have been signed for bribes and do not benefit the nation.
  • Foreign Exchange Management Act (FEMA) should be amended to introduce criminal provisions and money laundering should be punished with minimum of five years of imprisonment. India has been dubiously slow in complying with the provisions of the Financial Action Task Force that seeks to control money laundering. In the USA the corresponding jail term for money laundering is 20 years.
  • The government should hand over these projects to the listed and profitable PSUs in the mining, power, steel and aluminium sectors.
  • If projects result in expropriation of the tribals, the victims should have 25 percent equity allotted to them and 26 percent should be owned by the government. The rest should be given to the PSUs or the private sector on a competitive bidding in respect of the equity they are willing to offer to the tribals/government.

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