BY KRISHNARAJ RAO
Have you recently heard any jokes about selling Taj Mahal to foreign tourists? No? Not lately?
That is because people don’t joke about that nowadays. Reason: you can almost do it now. Sell the Taj, that is.
Here’s how. First, call it a public private participation (PPP) initiative; next, put the Taj into a separate corporate vehicle; third, sell a majority stake in it and tell the public to mind its own business. Who can object, for it is a public-private initiative, where the public is upfront, and private comes next?
Without a clearcut PPP policy and without regular audits by the Comptroller and Auditor General (CAG), India’s public property is being carved up and sold like paneer. The sale of assets is couched in PPP terminology like modernization of infrastructure, special purpose vehicles, etc.
This is how the Mumbai and Delhi airports have been sold to private parties without calling it sale of public property. But that happened several years ago under UPA-1. In any case, the idea of PPP can be theoretically defended as an effort to rope in private investment for public causes. The problem lies in what PPPs have come to mean: keeping the public out.
What has now transpired is that the public can be locked out of any information on what is going on at these PPPs. Even if the courts tell Mumbai airport to answer RTI queries, it can stonewall and keep the public out. PPPs are now only about staying private. There is no “public” spirit left in them.
But before we get to Mumbai airport, let’s look at how these things are done.
Let’s say we want to convert Mumbai’s Chhattrapati Shivaji Terminus (CST) railway station into Lalu Yadav Railway Station.
It hasn’t happened yet. But consider this scenario three years hence. The year is 2015. Patna-based Lalu Yadav & Sons Ltd (LYSL), in collaboration with a consultant company called Pirates of Somalia Ltd, newly registered in Mauritius, takes over CST in Mumbai. The railway ministry transfers CST’s heritage building and all surrounding railway lands to LYSL on a 30-year lease for only Rs 100 per year. LYSL in turn transfers this land to a subsidiary company. This subsidiary company uses it as security to take an “infrastructure loan” of thousands of crores from a consortium of public sector banks. Hotels and commercial spaces start sprouting on railway land. Pirates of Somalia Ltd periodically sends technical consultants who freely travel throughout the railway system, and nobody has the authority to question them, not even the railway ministry.
Worried about national security and public property, citizens file RTI applications questioning this activity. Lalu Yadav & Sons says, “We are not part of the government, and so we are not under RTI. We are a private company, this is a private for-profit activity.”
Central Railway, which owned CST before the PP came up, and the Union Railway Ministry don’t answer queries, saying that only Lalu Yadav & Sons has the answers. Finally, in 2016, Chhatrapati Shivaji Terminus is officially renamed as ‘Lalu Yadav Railway Station’.
Is this a far-fetched scenario?
Now consider another scenario: ‘GVK Reddy Airport in Mumbai’
True or false? True. It has already happened. Except for the renaming, everything else mentioned in the previous scenario has already happened to Mumbai’s Chhattrapati Shivaji International Airport (CSIA). Mumbai’s airport has been the private ‘jagir’ of GVK Reddy for four or five years now. While the UPA government seems happy with this situation, the common man is fighting in court.
The Airports Authority of India (AAI) has a 26 percent stake, and GVK Airport Holdings Pvt Ltd holds about 51 percent in a consortium called Mumbai International Airport Limited (MIAL). The remaining 23 percent shares are held by two ‘khokha’ companies registered in Mauritius, whose relationship with two similar-sounding South African infrastructure companies is being actively concealed by the government of India. In GVK’s annual reports, MIAL is called an “associate company”.
The language of the annual reports indicates that the accounting treatment of MIAL is like a GVK Group subsidiary company rather than as a public-private entity in which GVK is a majority private sector partner.
While enjoying 2,000 acres of AAI land for a lease rent of Rs 100 per annum, and paying ridiculously low income tax and service tax of around Rs 3,000, GVK claims the freedom to act as if it is just another private limited company working to maximise profits. It is running MIAL in collaboration with the two ‘khokha’ companies – namely ACSA Global Ltd and Bid Services (Mauritius) Ltd – which have shadowy links to the companies that were evaluated by AAI and found worthy to be partners in the MIAL Consortium, namely Airports Company South Africa and Bidvest of South Africa.
The common man who asks questions to MIAL is being stonewalled. See MIAL’s reply to Sanjay Shirodkar’s RTI application.
In June 2008, the Bombay High Court ruled that MIAL is an instrumentality of the ‘state’. But GVK still refuses to adopt standards of transparent dealing that come with being an instrumentality of the state, and a custodian of state properties. What is alarming is that the Indian government is quietly playing along with GVK.
To shield GVK and the ‘khokha’ companies, even public authorities such as AAI, the aviation ministry, the finance ministry, the Airports Economic Regulatory Authority (AERA), the Planning Commission and other government bodies that are privy to MIAL’s dealings are continually evading RTI queries. No government agency wants to disclose anything. See Sanjay Shirodkar’s many RTI Applications and the evasive replies received.
A consortium of banks, most of them in the public sector, gave an infrastructure loan of Rs 4,200 crore to MIAL. Whose money? Yours and mine. But the details are being concealed by the banks. In a worryingly perverse order, Central Information Commissioner Shailesh Gandhi opined that it was a matter of “commercial confidence and fiduciary relationship” between the banks and the borrower, and there was no public interest in our knowing about it.
How GVK is abusing judicial process to cause delays
The question of whether MIAL is a public authority (i.e. answerable under RTI Act 2005) was decided by Bombay High Court in Writ Petition No. 617 Of 2007. The judgement dated 5 June 2008 said, “the issues which arise for consideration in the present Writ Petition are: (i) Whether the Respondent No 3 company, MIAL, is ‘state’ within the meaning of Article 12?”
On page 170 and 171 of the judgement, after lengthy reasoning, Bombay High Court concluded, “It is because Respondent No 3 performs governmental functions that… it can just like government use a summary procedure to evict unauthorised occupants on the area leased to it without following the rigour of the Rent Act. This shows unmistakably that Respondent No 3 is “state” for the purpose of Article 12.” Read highlighted portions of Bombay High Court judgement dated 5th June 2008.
The question of whether MIAL was a public authority as per RTI (which is the same as being “state” under Article 12 of the Constitution) was simultaneously considered and answered by the Central Information Commission in June 2008. The CIC ruled that MIAL, like its counterpart DIAL (Delhi International Airport Ltd), is a public authority, and therefore directed it to furnish the information requested under RTI.
But MIAL did not want to comply. As this matter had already been decided by Bombay High Court, MIAL did not have the option to appeal before the Bombay High Court. So it went to the Delhi High Court and pleaded that its submissions had not been heard by CIC. (This unlawful behavior is called forum-shopping – actively seeking a court that might give a favourable judgment.)
The Delhi High Court asked CIC to rehear the case. CIC heard the case again and gave the verdict that MIAL is definitely a public authority as per section 2(h) and, therefore, it must give information requested under RTI. Read the CIC order dated 30 May 2011.
MIAL, still determined to not provide information, filed yet another fresh petition before the Delhi High Court. To avoid being held accountable as a ‘state’ as per the Bombay High Court judgment, MIAL is now dragging on this case in the Supreme Court.
In this way, MIAL, or rather GVK Group, has built up a mass of 15 litigations before the Supreme Court alone, causing confusion and maintaining the status quo.
Why is everyone silent on this blatant stonewalling?
The interesting thing is that even while the Congress-led government – which handed over the airport to GVK – may have its own reasons to cover-up what MIAL is upto, the opposition parties seem to be willing to let things be.
But it’s clear that a twisted logic operates in PPP: On the one hand, the government gives the private partner public resources worth thousands of crores, ostensibly because the private partner is supposedly maintaining a piece of public infrastructure. On the other hand, the private partner is free to avoid being questioned and to seek undue profits as he argues (and the government agrees) that this is a private activity. How can building and maintaining public infrastructure be a private activity? How can any such information be ‘private’ or ‘confidential’?
Don’t ask, because this twisted logic is an accepted part of PPP projects.
So, let’ sell the Taj under PPP.
(Krishnaraj Rao is an RTI activist. The opinions expressed by the author and those providing comments are theirs alone, and do not reflect the opinions of Canary Trap. This post was first published on Firstpost on June 12, 2012)