Friday, June 27, 2008

Contempt of Citizen's Sovereignty

Contempt of Citizen’s Sovereignty
Sometime back the Chief Justice of India has made two statements in Public speeches, which have a seminal bearing on the functioning of our democracy. He said that judges are above the Right to Information law. Later,- in Kerala,- he justified the existence of the Contempt powers of the Court, saying that,” No executive officer will obey court orders if they are not afraid of the provisions of contempt of court.” The first statement seeks to put judges beyond the RTI law and the second misses the major point why Citizens have been highlighting the misuse of contempt powers.
We must understand that there are two types of Contempt of Court-criminal contempt and civil contempt. If somebody does not obey the orders of the court, he is held guilty of committing ‘civil contempt’. Nobody has questioned the need for continuing the provisions of ‘civil contempt’ to enforce the orders of the courts. On the other hand, the provisions of ‘criminal contempt of court’ are attracted if the court feels its decisions, or conduct, are questioned; as they say if the judge or court are scandalized. Citizens have been questioning the need and desirability of continuing with the ‘criminal contempt’ provisions.

It is well recognized that the center of a democratic setup is the individual Citizen who is a sovereign in her own right. She gives up part of the sovereignty to the State in return for a Rule of Law. The Instrumentalities of the State exist to serve the Citizens who are the Masters. The Masters have the right to scrutinize and question their Public servants,-including the judges,- about the actions that are taken on their behalf. The existence and legitimacy of the Public servants is derived from the service they provide to the Citizens. Some special privileges and immunity may be given to the Public servants only to ensure that they can function to serve this objective. Otherwise the key principle of democracy is equality before the law. As Justice Mathew had said, “Be they ever so high, the law is above them.”
Let us now look at three sets of Public servants and test the principle of the respect and protection they need, to be able to discharge their duties for the Citizens. Let us take the elected representatives, the Police and the Judges to test this principle. The elected representatives have the highest legitimacy because they subject themselves to a direct approval by the Citizens every five years. It can be argued that they need to be able to command respect from the Citizens, without which respect for the laws they frame will not be forthcoming. They frame policies, which have political and financial impact on the present as well as future generations. They have to face people directly in every conceivable place and time, and if special privileges or protection against criticism is not given to them, they will not be able to discharge their functions. Let us now picture a policeman who has to enforce the law. He again faces Citizens,- even enraged or inflamed mobs,- and must function in the midst of all the dirt and grime to enforce the law. If Citizens do not respect him,- or believe he is corrupt and a criminal himself,- can he discharge his law enforcement function to the Public? On the other hand a judge sits in a cloistered and protected environment and dispenses justice to uphold the law. He is in a very safe and secure environment and discharges his functions at his own convenient pace comfortably sitting in a chair.
The Police and elected representatives face our criticism and the judges themselves have ordained greater transparency and accountability for them. They cannot claim supernatural power to try Citizens for contempt for speaking or writing critically about their conduct. We understand the need for the Court to have the powers to try for Contempt if its orders are not implemented. But the privilege of being able to terrorize Citizens and media into not examining or questioning their actions or decisions is an anachronism. Criticism strengthens all democratic institutions and the power of the Citizens to question their Servants is Supreme. If allegations and charges of impropriety or corruption render Public Servants ineffective then we must consider extending the warm obfuscating cloak of ‘Contempt powers’ to all of them. We make allegations against MPs and MLAs, carry out sting operations against them, and nobody including the Courts have argued that this is the cause of our misgovernance. The Courts infact have ruled that Citizens have a right to know even the personal assets and details of criminal charges from those who seek our vote. Can the executive and the judiciary then be exempt from this? It is unfortunate that the Courts,- which made lofty pronouncements of the Right To Information being a fundamental right of Citizens,- have been extremely reluctant to subject themselves to the provisions of this law.
A myth is being propagated that the judiciary is much better than the other instrumentalities of the State. This is untrue and most probably the same diseases which afflict the rest of our governance exist in the Courts. All voices are terrorized into silence by muzzling. Nobody knows the truth; and the peril is that the decline could be more than elsewhere because of this cloak of Contempt with which the judiciary protects itself. Let us stop mouthing the cliché, “We have faith in the Judiciary,” and give the clear statement that we shall question, since it is our fundamental right.
The Court has no authority to make Laxman Rekhas for its Masters-the Citizens of India. It is we who will draw the Citizen’s Rekhas which the Public servants shall not cross. When a Prime Minister of India tried to muzzle our Freedom of expression and press, we defeated her at the elections. For unwarranted or motivated allegations, the Citizens including the Prime Minister and judges have the protection of the laws on defamation. There is absolutely no justification for the judges to give themselves the power of the Lord to be above all criticism and trnsparency. The Criminal contempt of Court must be scrapped.
“A discriminating irreverence is the creator and protector of human liberty”. –MARK TWAIN

Thursday, June 26, 2008

Nhava Sheva fraud

Nhava Sheva Transharbour Sea Link- Fraud explained

We all expect and accept corruption in the large Infrastructure projects. But this project gives us the smoking gun;- where we have proof of the brazen manner in which a fraud is being committed.
Here are the facts mostly unearthed using Right to Information. My enquiries started in September 2007. The Supreme Court had ruled that the disqualification of Anil Ambani’s Company for the bidding of the Mumbai Trans Harbour Sea Link Project (MTHL) was bad and that ‘the decision to exclude REL/HECL is arbitrary, whimsical and unreasonable’.
I was curious to know some details about this project, which has been said to be around 3000 crores, and asked for copies of the minutes of meeting at which the decision to disqualify REL/HECL was taken. When I received the minutes, they revealed some really disturbing matters.
1. Anil Ambani’s REL with Hyundai was disqualified on grounds of financial inadequacy! The discussions show that REL itself had adequate financial standing to qualify.
2. Crisil was involved in the evaluation of the bids. The meeting brings out the fact that Crisil was a consultant to Ms. Seaking which was linked with Mukesh Ambani’s Reliance group. Crisil qualified Seaking, and disqualified Anil Ambani’s group on the grounds of financial inadequacy! The issue of conflict of interests was raised at the meeting and forgotten!
3. Another very curious aspect was that another Company China Harbour was disqualified on what appeared to me to be absurd reasons! Further RTI queries revealed that the Company had had given proof of having made a longer bridge 32.5km bridge in China, whereas the Nhava Sheva bridge is just 22 km. It had made the 32.5 km bridge for just 851 crores, whereas MSRDC’s estimate for the Nhava Sheva 22 km. was over 2000 crores hence it was not allowed to bid!
(Note: Indian contractors have managed to jack up the price of the 5.6 km. Sealink to over 1600 crores, where China Harbour is the main subcontractor.)
Consequent to the Supreme Court’s order Anil Ambani was allowed to quote for this BOT project. When the bids were opened, the Anil Ambani Company had offered to build the bridge, recover its costs through tolls and then hand over the bridge to the State in nearly 10 years, whereas the Mukesh Ambani group had asked for revenues for over 75 years. Now the State has decided not to give the project to the Anil Ambani company, but to build it itself! This is obviously because there is not enough padding in his offer
to pay the huge bribes now. The State calims that the offer should be about 44 years to recover the revenue. I have asked for details of the minutes of meetings at MSRDC, but a simple calculation is very revealing. The assumptions by the bidders have been for 50000 vehicles per day at Rs.150/ per trip. A simple calculation based on this shows that this would lead to a revenue of Rs. 75 lacs per day or about Rs. 270 crores each year.
Based on a return of Rs.270 crores per year and a rate of 6%, 8% and 10% returns, the Net present Value will be as shown in the table below:









Interest Rate10 years44 years75 years
6%198741734443 NPV in crores
8%181232693364NPV
10%165926632698NPV
Anil’offerMRDCestimateMukesh offer

This shows that the Mukesh Ambani estimate is uncannily close to the MSRDC’s estimate, whereas the Anil Ambani group is estimating the cost as about half,-about 1700 to 2000 crores. The difference of 10 years, 44 years and 75 years actually is much lower the moment you factor the NPV. This is almost like the equated instalments paid by in any normal loan transaction with constant repayments. The State is refusing a reasonable offer made by Anil Ambani on the grounds that it is too low! Anil Ambani is also playing along to get some humour the administration. The State now says it will build the bridge itself and will levy an impact fee-an increased tax,-to pay for the bribes?
In brief:
1. It appears that initially the project was designed to be given to the Mukesh Ambani group with over 50% being reserved for ‘education’-a la Enron.
2. To achieve this others like China Harbour and the Anil Ambani group were disqualified by a rigged process.
3. Incidentally China Harbour has built a 32.5 km seabridge in China for 851 crores and is the main subcontractor for the Worli-Bandra sealink. Anil Ambani wanting to best his elder brother played the spoilsport and bid about 50% -which did not leave much for bribes.
4. In a weird development, the State says Anil Ambani’s bid is too low and Mukesh Ambani’s bid too high, hence it will undertake the project. After four years of proposing a BOT, the State gives no explanation for this turnaround. Anil Ambani has obviously been pacified in some manner. Anil Ambani has made a reasonable offer, and the State has qualified his consortium with Hyundai. China Harbour was disqualified for the ability to build a bridge of 32.5 km for 851 crores, and after the bidding Anil Ambani’s group is not awarded the project because we will get it at a reasonable cost-translating into roughly 2000 crores.
5. Now the State will decide to build this and the current Government will award it for around 6000 to 7000 crores. Next year when the political dispensation will probably change the new ministry will hike it maybe 10000 crores. Do we remember ENRON?
Citizens, business houses and others must protest strongly and make the Government act in Public interest. The methodology being adopted has brazen CORRUPTION written all over, and offers us an opportunity to reverse it.

shailesh gandhi