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In Our Gaseous State: Paranjoy Guha Thakurta

Written By Gopal Krishna on Saturday, April 19, 2014 | 10:59 PM

Exclusive extracts from a new book on the KG Basin gas controversy reveals for the first time the views of two key players well acquainted, through first-hand knowledge, with Reliance’s moves on the pricing and use of natural gas
Gas Wars: Crony Capitalism And The Ambanis
Gas Wars: Crony Capitalism And The Ambanis
By By Paranjoy Guha Thakurta with Subir Ghosh and Jyotirmoy Chaudhuri
Published by Paranjoy Guha Thakurta (www.gaswars.in) | Pages: 588 | Rs. 695
Subir Raha
Former chairman of ONGC, 2001-06
When Raha met the lead author of this book on September 17, 2009, the cancer in his lungs was spreading. His hair had thinned after several rounds of chemotherapy. Still, he was remarkably alert. His words poured out in torrents; he was crystal clear about his convictions and his conclusions. He imposed only one condition before he started talking—he wanted to go through and vet the detailed transcript of the interview before a single word attributed to him was published. The transcript was sent to him, but he never got back. On February 1, 2010, Subir Raha passed away. He was 62.
In the first round of bidding under the new policy, that is, NELP-I, the Reliance group emerged as the winner in most blocks. In an open and transparent bidding process, ONGC lost out to Reliance in the race for a number of blocks. Raha said he had heard that secret information about the ONGC bids had been leaked out, though he could not independently confirm who had done this and for whom. “My guess is as good as yours,” he remarked.
The D6 block in the KG basin had gone to Reliance in 2000. Bidding was done by companies on the basis of certain databases. All investors had access to the same data, thereby offering a level playing field to all. However, additional data could be informally sourced from other companies that were already involved in the business of oil and natural gas exploration. Raha recounted a story he had heard about how data was sourced by Reliance for the KG basin before the company placed its bid. According to this story, Anil Ambani, who was still with his elder brother Mukesh, visited a retired ONGC official in Hyderabad to obtain more knowledge about the KG fields that his company wanted to acquire. The gentlemanly officer unpacked a few old papers from a rusty iron trunk and these documents apparently provided them with crucial clues about the reserves of oil and natural gas that lay beneath the bed of the Bay of Bengal.



According to Raha, Anil Ambani (still with his brother then) met an ONGC official about the KG fields.

According to Raha, natural gas is not the only mineral that belongs to the nation. All minerals found in the country are sovereign properties. As far as India is concerned, Raha pointed out that each minister in the government takes an oath of office when he is sworn in, and part of that oath is that he will act in a way that is fair to all the people of India. It is, therefore, the duty of each minister to protect the sovereign rights of the country. A classic example of privatisation of mineral resources in India, he pointed out, was that of Bharat Aluminium Company Ltd (BALCO), the PSU engaged in the production of aluminium. Till 2001, BALCO used to be a PSU with 100 per cent of its shares owned by the government of India. That year, BALCO was privatised—the government sold off 51 per cent of the shares of the PSU to Sterlite Industries (India) Ltd, which is now part of the Vedanta group headed by Anil Agarwal. In the process, the government privatised the biggest reserves of commercially available bauxite in the country without undertaking a proper independent valuation of the mineral resources that would accrue to the private company. There is no difference between bauxite and gas, or for that matter coal or dolomite, as far as their sovereignty is concerned, he emphasised.
This is where the issue of the PSC (Production Sharing Contract) crops up all over again. Raha said the responsibility for the controversy over KG gas rests squarely with the mopng. The ministry is the custodian of the NELP (New Exploration Licensing Policy) and the contracts that flow from the policy, and if the ministry had truly abided by the NELP and the PSCS signed in letter and in spirit, legal disputes could easily have been avoided, he argued. What Raha suggested, though not in so many words, was that the problems over pricing and allocation of KG gas was created because the mopng and the government of India through the EGOM headed by Pranab Mukherjee, directly or indirectly, sought to benefit one private party, in this case, RIL.

Mani Shankar Aiyar
Petroleum minister, 2004-06

More than two years and eight months after he was suddenly and ignominiously removed, Mani Shankar Aiyar gave an extraordinarily detailed and hard-hitting speech about the controversy relating to the pricing and allotment of natural gas from the Krishna-Godavari basin. He referred to the tussle between the Ambani siblings and left nobody in doubt that the government’s role in the entire episode was questionable, if not downright dubious.
On 26 September 2009, Aiyar, known for his gift of the gab, was at his wittiest best speaking to a small group behind closed doors. For instance, when he referred to how the price of gas had been increased by the EGOM from $2.34 per mBtu to $4.20 per mBtu, he quipped, tongue in cheek, on the number 420; for the uninitiated, Section 420 of the Indian Penal Code relates to cheating and fraud, and provides for punishment of the convicted.
Aiyar’s speech was delivered shortly after noon (the meeting was conducted under the aegis of the ‘Saturday Lunch Club’ in New Delhi’s India International Centre). An interesting aspect of the speeches made at the Saturday Lunch Club is that these are largely governed by the ‘Chatham House’ rule that ensures confidentiality of the source of information received at a meeting.


In his talk, Aiyar explained how the NELP framework was ‘dramatically altered’ by the government....

Aiyar’s talk was simply titled ‘Gas Pricing’ and lasted for about half an hour. Hailing the discovery of gas by RIL in the KG basin as an important breakthrough for the country, Aiyar said that in an era when global gas prices had skyrocketed he was hopeful a lot of foreign exchange could be saved even as the country could become self-sufficient in gas. The former petroleum minister then explained how the NELP framework was ‘dramatically altered’ by the government in a manner that ran ‘in stark contrast to what was once expected of the direction of economic reforms’. Aiyar’s next few sentences were sharp: “No minimum selling price was earlier stipulated; on 12 September (2009), the Empowered Group of Ministers determined a minimum selling price of $4.20 (that is emphatically not a pun on the nature of the decision!): that price applies retroactively to PSCS entered into since 2000. It is almost double the NTPC/RIL price discovery of 2002. It would appear that the $4.20 stipulation relates both to valuation and selling price (or at least, minimum selling price). This minimum selling price provision is backed up by a list of priorities which places fertiliser ahead of power (and is, therefore, detrimental to Anil’s interests, especially as the gas allocations pre-empt all of present gas production for consumers already in operation and privilege the public sector)....”
Aiyar said that while earlier PSCS provided that the government reserved to itself the right to refer pricing issues to the proposed Petroleum and Natural Gas Regulatory Board when no such board existed:
“Now that such a board has been constituted, the new PSC drops all reference to the board and essentially reserves to the government the right to unilaterally decide all matters pertaining to pricing. Does this constitute a reversal of reforms? More to the point, will this discourage future private sector investors from entering the Indian petroleum exploration and development market?.... Also, should government interventions be aimed at raising prices for sellers or at keeping prices down for consumers? This appears to be the first case of a government fiat, resulting in consumers being asked to pay more for an essential commodity than might have been available from price indications in the marketplace.”

When contacted by the lead author of this book, Aiyar refused to either confirm or deny what was attributed to him. He cited the famous Chatham House rules and said he could not speak on the topic.


Legal Notice on book "Gas Wars: Crony Capitalism and the Ambanis", a SLAPP assault on democratic rights

Collusion of political parties & RIL became manifest in unopposed re-election of Parimal Nathwani to Rajya Sabha

Who all are colluding to overprice the gas?

April 19, 2014: In a classic case of commencing a strategic lawsuit against public participation (SLAPP), legal notice has been served on the authors, publisher and distributor of the book "Gas Wars: Crony Capitalism and the Ambanis" by Reliance Industries Limited (RIL) and Mukesh D Ambani, the Chairman and Managing Director of RIL. This exercise is an assault on democratic rights. SLAPP is a lawsuit that is intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition. This book which captures a historic moment of Indian economy has been authored by Paranjoy Guha Thakurta with co-authors.

The following excerpts from the 588 page book in question have been quoted in the legal notice:
·       …Sections within the government of India, including the Office of the Comptroller and Auditor General (CAG) of India, a Constitutional authority mandated to oversee public finances, have been sharply crtical of the manner in which another wing of the government, the ministry of petroleum and natural gas (MoPNG), designed contracts and tailored rules to favour the country’s largest privately owned corporate conglomerate, Reliance Industries Limited (RIL), headed by India’s richest man Mukesh Ambani.  (Preface page ix)

·       Prime Minister Manmohan Singh has been accused of changing ministerial portfolios at the behest of the same corporate group, an allegation that RIL predictably denies. There have been claims that the group deliberately “squatted” on reserves of natural gas and curtailed production in anticipation of higher prices that are administered by the government, to the detriment of the interests of the country’s people…(Preface page ix)

·       In October 2012, when Sudini Jaipal Reddy was removed from the post of Union minister of petroleum and natural gas and made minister for science and technology, opposition politicians alleged that he had been ‘kicked upstairs’ because he had refused to knowtow to the Ambanis. His ministry had claimed that RIL was ‘deliberately’ reducing gas output and exerting pressure on the government to increase the administered price of gas, charges the company denied. The ministry alleged that the fall in gas production had resulted in an estimated loss of $ 6.3 billion (or over 32, 000 crore at that time) to the country and sought to levy a penalty on the company. In June 2013, another Left MP Gurudas Dasgupta went hammer and tongs at Jaipal Reddy’s successor M. Veerappa Moily for over-ruling his own ministry’s bureaucrats as well as those of other ministries to prepare the ground for a hike in the government administered price of gas, describing the episode as a gigantic scam. Unfazed, later that month, a deeply divided Cabinet Committee on Economic Affairs decided to double the price of gas with effect from April 2014. This raised a hue and cry amid allegations that the government had gone out of its way to favour RIL. (Preface page xi)

·       …The CAG report, tabled in Parliament in September 2011, did not quantify the losses to the state exchequer caused by RIL, but its insinuations were clear: the company had reaped huge profits thanks to the acts of commission and omission of a number of influential ministers and bureaucrats. The exchequer had been cheated because the government had failed to act as an impartial custodian of resources that belong to the people of India. (Preface page xi)

·      This book is an attempt to unscramble and explain the entire series of controversies relating to KG gas and the battle between the Ambani brothers. It highlights cases of crony capitalism that allowed the RIL group to blatantly exploit loopholes that were consciously retained in the system. In doing so, it underlines instances of policies and procedures that were tailored to help increase the fortunes of a few. It points out how, even when laws and policies appeared fair, rational, and reasonable, the way in which these rules and procedures were framed and implemented by bureaucrats acting at the behest of their political masters resulted crony capitalism. (Preface page xii)
·       This book inter alia seeks to lay bare the manner in which official contracts are structured in order to allow enough room for the government to be cheated of revenue and the country’s natural resources to be siphoned off with impunity. Indeed, the government’s role in the still-continuing KG basin epic is one among many instances of ruthless exploitation of natural resources in different parts of the country and the world. The pages that follow tell the story of how a corporate conglomerate, in this case India’s largest, was able to benefit from the way government policies were designed. In doing so, a pattern begins to appear, which epitomises the rise of the Ambanis over the years.   (Preface page xii)
·       If anyone nurtured any doubts…From January 1980 till October 1984, when Indira Gandhi was assassinated by her bodyguards, several government policies were ostensibly framed or ‘designed’ to help the Reliance group. (Page 26)
·       The relationship between the Indian government and the Ambanis reflected new vistas of the intertwining of business and politics. The closed nature of the Indian economy at that time permitted the government to exercise control over economic activities…………….The state-the government of India led by representatives of the people-became relatively weak and often turned a blind eye as bureaucrats played favourites in disbursing business opportunities. In the days of the license raj, Dhirubhai Ambani, more than most of his fellow industrialists, understood the importance of ‘managing the environment’, a euphemism for keeping politicians and bureaucrats happy. He made no secret of the fact that he did not have an ego when it came to paying obeisance to government officials, whether secretaries to the government of India or lowly office attendents or peons. Dhirubhai did not subvert the process; he just made the best use of it. Even before began his industrial career, Indian politicians had been known to curry favour with businessmen. Licences and permits would be framed out in return for handsome donations during election campaigns. By the time the Reliance group’s fortunes were on the rise in the 1980s, the Indian economy had become more competitive. It was now insufficient for those in power to merely promote the interests of a particular business group; competitors too had to be shown their place. That is precisely what happened to rivals of the Ambanis, and this was an important new dimension to the nexus between business and politics. (Page 28)    
·       Few today remember a company called Swan Mills or, for that matter, Kapal Mehra, who headed a corporate group named Orkay, and who was raided by tax personnel and jailed. Another business rival of the Ambanis, Nusli Wadia of Bombay Dyeing, became a pale shadow of what he might have been had his entrepreneurial ambitions been fulfilled. Even the undivided family headed by the late Ram Nath Goenka, with its then control of the Indian Express chain of newspapers, which conducted a relentless campaign against the Reliance group in 1986-87, split into three factions after his death. (Page 29)
·       A popular joke of the 1980s started with a question: Which is the most powerful political party in India? Answer: the Reliance Party of India. Dhirubhai’s supporters were not confined to those affiliated to the Congress (notwithstanding his proximity to Indira Gandhi), but cut across party lines. Few had the gumption to oppose the Ambanis, just as the overwhelming majority of journalists preferred not to be critical of Reliance. The Indian media, as a rule, lapped up whatever was doled out by the group’s public relations executives. The bureaucracy too, by and large, favoured the Ambanis, and not merely because many babus had got accustomed to receiving lavish hampers on Diwali. (Page 29)
·       By then, the image of…The Reliance group was seen as one that had survived and prospered not through entrepreneurial acumen but as a result of political patronage. (Page 57)
·       By then, the image of….The author of the Economist survey, Clive Crook, singled out the Reliance group for criticism. He wrote that the group symbolised all that was wrong with India, how the country’s corporate captains took advantage of favourable regulations to build monopolistic empires. The system smacked of nepotism and corruption. (Page 58)
·       ….What Mukesh meant was that his late father had ‘resolved’ these ownership issues in his favour and that Mukesh was indeed the legitimate heir to Dhirubhai legacy….(Page 71)
·       The battle over natural gas…Both brothers proved to be selfish, vengeful and greedy. It was a war without values. (Page 79)
·       A deeply divided Cabinet is upset with the shenanigans of the Murli Deora controlled Petroleum and Natural Gas Ministry. Also known as Mukesh Ambani’s B Team in the capital. With stakes extremely high in their battle over gas, no stone is being left unturned by Mukesh Ambani and Murli Deora. But this has left senior ruling party politicians fuming for the blatant disregard of the rule of law to ensure that Mukesh Ambani gets his right of way. Forget younger brother Anil Ambani who is fighting him for the gas. Public Sector power utility NTPC (National Thermal Power Corporation) also be damned. NTPC has been waging a running battle with RIL, now lodged in the courts to get its share of KG Basin gas for its Kawas and Gandhar plants. But to no avail; a powerless power ministry has been tripped repeatedly by the all powerful Petroleum Ministry. With the government practically impleading itself in the Ambani gas row to protect Mukesh Ambani’s interests in the gas row, calling the family MoU as null and void in the matter, despite the honourable Maharashtra High Court ruling in favour of Anil Ambani owned Reliance Natural Resources, caution has now been thrown to the winds. (Page 93)
·       There is yet another saying about the Ambanis: ’Once the enemy has been defeated, the victor appears generous-the loser invariably joins hands with his erstwhile adversary, even begging the latter to forgive and forget.’ This, in fact actually happened with many former rivals of the Reliance group, the most famous of them being Kapl Mehra (Orkay Mills). The Ambanis were certainly not unhappy when the Indian Express group, which had taken them on, got trifurcated after the death of Ram Nath Goenka in October 1991. (Page 96)
·       In other words, what RIL was claiming was that it played strictly by the rules, It is, of course, a seprate matter altogether that the rules themselves were tweaked to favour the company. (Page 145)
·       The Ambani brothers, Mukesh and Anil, had fought a pyrrhic war to control India’s natural gas resources. (Page 156)
·       As we close this incomplete chronicle of how a single corporate conglomerate led by an oligarch fine tuned the art of crony capitalism in collusion with particular politicians and pliant bureaucrats. (Page 406) 

The authors of the book ‘GAS WARS’ have responded saying, the book "has been more than fair providing versions of events, circumstances and controversies based on research made from various public documents, opinion of individuals available in the public domain, including media reports etc. The authors, being journalists, are exercising their right to free expression enshrined in Article 19(1)(a) of the Constitution of India."
The core issue that this scholarly and rigorously referenced book seems to be raising is: who all are colluding with RIL to deprive present and future generations of Indians of their claims of the natural resources of the country?
The collusion of political parties came to light in the unopposed re-election of Parimal Nathwani, Group President of Corporate Affairs at RIL to Rajya Sabha. Nathwani is a native of Gujarat, has been re-elected to the Rajya Sabha from Jharkhand. Four AJSU party MLAs and six BJP legislators proposed Nathwani’s name. He was elected to Rajya Sabha for the first time in March, 2008.
Take the case of pricing of the natural gas which has been made an electoral issue by AAP on which BJP, Congress and the regional parties are maintaining a deafening silence.

If gas price is low as per correct production rate then, why should Indians pay higher price of gas? Who wants Indians to pay price of Indian natural resource as per US price rate?
All mining resources belong to the people of India. In the case of oil and gas sector, government enters into contractual relationship with the private player through a Production Sharing Contract that specifies the cost recovery and profit sharing. Government’s Directorate General of Hydrocarbon monitors the execution of the contract. The production sharing contract reads, “By virtue of article 297 of the Constitution of India, Petroleum is a natural state in the territorial waters and the continental shelf of India is vested with the Union of India.” The Supreme Court has ruled, ‘the government owns the gas till it reaches its ultimate consumer and parties must restrict their negotiation within the conditions of the government policy.’
A letter dated January 20, 2014 written by Tapan Ray, Managing Director, Gujarat State Petroleum Corporation Ltd (GSPCL), a Government of Gujarat Undertaking to Vivek Rae, Secretary, Union Ministry of Petroleum and Natural Gas, Government of India has come to light suggesting a formula which will make the cost price of gas reach $14, which is quite higher than what the Indian National Congress led Government at the center has recommended. The letter seeks “approval of Gas price formula for gas to be produced from Deen Dayal West (DDW) Gas Field.”  The letter dated April 02, 2013 reads, “As per bids received during E-auction, the clearing value of the biddable component was discovered as 0 (Zero). The equivalent gas price at V=0 and Brent Cride Oil Price of 110 US $/bbl is 14.20 US $/mmbtu (on GCV basis).” mmbtu stands for million British thermal unit. The letter dated January 20, 2014 reads, “GSPCL requests the Government to accord its approval for the sale of DDW Gas as per the Gas Price Formula proposed in the referred letter dated April 02, 2013.” Tapan Ray’s letter refers to his earlier letters dated April 02, 2013, June 10, 2013 and November 20, 2013 in this regard.
The April 02, 2013 letter states, State Petroleum Corporation Ltd (GSPCL), Jubilant Offshore Drilling Pvt Ltd (JODPL) and GeoGlobal Resources (India) Inc (GGR) signed a Production Sharing Contract (PSC) on February 4, 2003 with Government of India under NELP-III for Block KG-OSN-2001/3 located on East Coast of India. As per PSC signed with Government of India, GSPCL is designated as the Operator to carry out all exploration and development activities in KG-OSN-2001/3 block. GSPCL has achieved significant progress in development of Deen Dayal West (DDW) field in the KG-OSN-2001/3 block.”
This letter states that a process of price discovery through E-auction was carried out for which Expression of Interest was published in The Times of India-All India Edition, Business Standards- All India Edition, Hindustan Times-North India Edition, Business Line-South India Edition) for the price discovery of DDW gas through E-auction.
The letter reveals that “the e-aution was developed by Pandit Deendayal Petroleum University (PDPU) and M/s Guj Info Petro Ltd (GIPL).” The entire process of the E-auction was verified by the Independent Auditor (KPMG).
To get a grasp of what is going on in simple words, let us say one has a oil well at one’s backyard and one hires a contractor to pump the water out of it and there is a broker in between.  The contractor agrees that they will charge 10 paisa on every 100 litres (as it was long term contract so this was the price negotiated). After some years (not even completed 20% of the contract duration, contractor came back and said increase the price, the broker involved said refused to dos so. The contractor bribed the broker and his associates following which the broker agreed to increase the price of the oil. After few years, the contractor again wanted an increase in the price and again broker agreed. After couple of years, the contractor proposed that he wants the price to be made as per the international price of oil. The broker agreed to revise the price.  But being the election season, such dictates of the contractor is embroiled in a deep controversy. 

In the instant case, instead of oil it is the gas that is in dispute wherein Reliance Industries is the contractor and ruling and opposition parties are the brokers. The parliamentary election of 2014 will decide whether or not the contractor will be able to bribe the brokers yet again. Meanwhile, one of the key individual brokers in the case has made himself immune from prosecution. It is he who will decide which coalition to invite for government formation at the centre in the likely event of a hung parliament. Like oil wells, gas which is discovered in India too belongs to Indians and it is Indians who are supposed to pay the higher price for gas because of collusion.
As government records, the 7,645 sq km block in KG basin has been named KG-DWN-98/1. The KG basin is the largest natural gas basin in India. A contract was signed between the government of India and undivided Reliance Industries and its minority partner Niko Resources (10 per cent stake) for exploration and production of oil and gas.
Which Indian company is more powerful than Government of India? Long before Aam Aadmi Party raised the issue of manipulation in the gas prices, Tapan Sen and Gurudas Dasgupta had established the fact of manipulation.   S Jaipal Reddy was shunted out from ministry of petroleum and natural gas because he was strongly opposed to increase the price of the gas.
Sen, a member of Parliamentary Standing Committee on Petroleum and Natural Gas has argued that the recommended formula for gas pricing in India is based on a wide variety of gas prices ruling in US, Europe and Japan and the netback price for imported LNG for India without taking into account the actual cost incurred by the domestic players for discovering and evacuation of the gas which is available aplenty within the country.
Although the matter was sub judice in the Bombay High Court, the gas price allowed to the contractor by Government’s empowered group of Ministers headed by Pranab Mukherjee on an earlier occasion at $4.2 per million British thermal unit (mbtu) in 2007 was already quite profit making for the contractor, if the price of $2.4 offered by the contractor itself to NTPC through an international competitive bidding is factored in. In fact even the $ 2.4 per mbtu was pegged at a higher price considering the fact that ONGC was supplying gas to the government at half the rate. Mukherjee headed committee ignored the objection of Surya P Sethi, Principal Advisor, Power and Energy to the Government of India who had argued that the cost of production nowhere more than $1.43. The $2.34/MMBTU bid by RIL, in a global tender, for the same gas has been ignored. Sethi was supported by the then Cabinet Secretary in vain. Sethi wrote an open letter dated December 23, 2013 to the Prime Minister saying, “A sham price discovery exercise was permitted to justify the higher price that the approved formula delivered.”
In fact pre-qualification norms have been diluted to ensure RIL qualified according to the findings of Comptroller and Auditor General's findings.
Krishna Godavari (KG) Basin is spread across 50,000 sq km in the Krishna River and Godavari river basins near the coast of Andhra Pradesh. The site Dhirubhai-6 (D6) is site of the biggest gas reserves in India. Government of India opened up hydrocarbon exploration and production in the country to private and foreign players in 1991. Small and medium sized blocks were opened up in this round which was followed up by giving out bigger blocks in 1999 as per the New Exploration and Licensing Policy (NELP). Reliance bagged the rights to explore the D6 block. Some people say that these reserves were known to government but Reliance Industries ‘discovered’ it.
The Reliance Industries Limited (RIL) is the first company to supply natural gas from June, 2008 onwards and has been pushing for market discovered price as their future pricing policy. As part of comments of various stakeholders on RIL’s Gas Pricing, even Dr. Y.S. Rajasekhara Reddy as Chief Minister, Andhra Pradesh has observed, “In the case of NELP projects, more particularly of RIL, the privatization is leading to a perfect monopolistic situation; a government monopoly being substituted by a private monopoly. Even the die-hard capitalists and champions of market economy would ungrudgingly concede that a private monopoly is highly dangerous and is decidedly against public interest. Where there
are not many suppliers of gas and where there is huge demand and supply gap, the RIL is trying to obtain bids from some desperate consumers at prices varying in between $4.5 to $5 per mmbtu and are claiming this to be the market driven price, forgetting that as a part of global competitive bid floated by NTPC, Gandhar, RIL itself had quoted a price of $2.97
per mmbtu including the transportation charges. This in fact should be reckoned as true market price, as there was global competitive bidding, where many others had participated and where there was perfect transparency in evaluating the bids. The RIL, having now realized its predominant monopolistic power, is trying to raise the bogey of a legal dispute to come out of the NTPC contract so as to wipe out $2.97 per mmbtu price quoted by them out of the memory of the people.” Late Dr. Y.S. Rajasekhara Reddy’s words sound prophetic in the current context. 
In such a backdrop, it does not appear surprising that as Delhi’s chief minister Arvind Kejriwal had ordered the state Anti-Corruption Branch (ACB) to file a case against Union petroleum minister M Veerappa Moily, former minister Murli Deora, Mukesh Ambani, chairman, RIL and V K Sibal, former director general hydrocarbons for allegedly overpricing of natural gas and underproduction from RIL's KG-D6 field. This was done following the complaint filed by E A S Sarma, former Union Power Secretary, TSR Subrmanian, former Cabinet Secretary, Admiral Tahiliani and Kamini Jaiswal, a noted Supreme Court lawyer.
In late March 2014, the Election Commission of India ordered deferment of an increase in gas prices that was to take effect from April 1, 2014 saying that the decision should be left to the new government that will be formed after the general election.
KG-D6 field is considered country’s largest gas find since its discovery in 2002. Notably, British Petroleum (now named BP) bought a 30 per cent stake for $7.2bn in 2011. This collusion is akin to the collaborators of East India Company, a transnational company headquartered in London and the British Government. Is it a coincidence that a British transnational company is involved once again in seeking overpricing of the gas?

For more information about the book visit: www.gaswars.in
For Details: Gopal Krishna, ToxicsWatch Alliance (TWA), Mb: 08227816731, 09818089660, E-mail:gopalkrishna1715@gmail.com, Web: www.toxicswatch.org

Request for probe in the matter of abduction and release of Mr. Abu Bakar Siddique

Written By Gopal Krishna on Friday, April 18, 2014 | 11:17 PM


H.E. Sheikh Hasina
Honorable Prime Minister
Government of the People's Republic of Bangladesh

Subject-Request for probe in the matter of abduction and release of Mr. Abu Bakar Siddique

Honorable Prime Minister,

This is with reference to the news about the kidnapping of Mr. Abu Bakar Siddique, Executive director of ‘Hamid Fashions Ltd’ and husban of Ms. Syeda Rizwana Hasan of Bangladesh Environmental Lawyer’s Association (BELA) on April 16, 2014. It is indeed a good news that Mr.Siddique was released on April 18, 2014. He was abducted by unidentified men from Fatulla in Narayanganj, while he was travelling to Dhaka from Narayanganj by car.

We appreciate prompt action by Government of Bangladesh which led to the release of Mr. Abu Bakar Siddique after 35 hours.

We wish to submit that there is a compelling logic for the concerned authorities in Bangladesh to undertake rigorous probe the role of the individuals and the circumstances which led to this sad incident. (Photo: Rizwana Hasan with Abu Bakar Siddique)

We submit that environmental and human rights organisations from India and across the globe were outraged at this cowardly act of the kidnappers. We wish to know the reasons and chain of events that led to the emergence of this situation.   The identity of the kidnappers must be made public and subjected to exemplary punishment as per law at the earliest to inspire confidence in the law enforcement agencies in Bangaldesh. 

We demand prompt action against the culprits and an impartial investigation whose result of which must be made public in a time bound manner.

Thanking You 

Yours faithfully
Gopal Krishna
ToxicsWatch Alliance (TWA)
Mb: 08227816731, 09818089660
Web: www.toxicswatch.org

Professor Dr. Gowher Rizvi, Adviser to the Prime Minister (International Affairs)
Mr. Asaduzzaman Khan, State Minister for Home Affairs, Ministry of Home Affairs
Mr. Anisul Huq, Minister for Law, Justice and Parliamentary Affairs, Ministry of Law, Justice and Parliamentary Affairs
Md. Shahriar Alam, State Minister for Foreign Affairs
Mr. Mahbubey Alam, Attorney General for Bangladesh, Attorney General's Office
H.E. Mr. Abdul Hannan, Ambassador, Permanent Mission of the People’s Republic of Bangladesh to the United Nations in Geneva
H.E. Mr Tariq Ahmad Karim, High Commissioner to India, Government of Bangladesh
H.E. Shri Pankaj Saran, High Commissioner to Bangladesh, Government of India
Shri Sandeep Chakravorty, Deputy High Commissioner, to Bangladesh, Government of India

Inter Linking of Rivers: How to kill rivers, the Gujarat way

Written By Gopal Krishna on Monday, April 14, 2014 | 2:06 AM

Having worked on linking Gujarat’s rivers, of course, sans any concern for socio-ecological impacts of such mega projects, state chief minister and BJP’s Prime Ministerial candidate is now promising a revival of the controversial Inter Linking of Rivers project at the national level.

After having contributed to one of South Asia’s two biggest planned disasters through Sardar Sarovar Dam which can never be justified if cost-benefit ratio in economic terms and environmental and human cost is taken into account, a totally indefensible and megalomaniac project to link all the major rivers of India has been promised by BJP.

BJP’s Prime Ministerial candidate is arguing that “In Gujarat, we have inter-linked 20 rivers and the agriculture growth is 10 per cent.” This claim seems to be misleading because government’s statistics reveals that agriculture in Gujarat is largely dependent on ground water for irrigation. As to the adverse consequences of linking of 20 rivers in Gujarat, there is an urgent need for independent teams to examine it.  If there is truth in Narendra Modi’s claims the Environment Impact Assessment (EIA) reports of these link projects in Gujarat should be put in public domain for public scrutiny. South Asia’s other disaster being drainage congestion crisis in Kosi basin. Modi has suggested the same medicine of linking rivers for the victims of development of Kosi region as well.

In their bid to outwit the resistance to such projects the proponents have a Plan A and a Plan B. The state’s proposal and projects are part of Plan B and Plan A is the national interlinking of rivers (ILR) programme. The ILR programme is estimated at an aggregated cost of Rs 1, 25, 342 crore at 2002-3 prices. It is aimed at creating additional storage facilities and transfer water from water-surplus regions to more drought-prone areas through inter-basin transfers. It is claimed that it will provide additional irrigation in about 30 million hectares and net power generation capacity of about 20,000 to 25,000 MW. 

These claims have been debunked by several experts who have examined its self contradictory claims and environmental costs. The interlinking of rivers is a misnomer. It is actually an exercise aimed at diversion of rivers from their centuries old courses.  This project is caught in time warp. It is an outdated project that belongs to an era when climate crisis was not a reality. This entails unprecedented amount of land use change and massive rupture of ground water aquifers.  This program proceeds in a colonial framework which deemed flow of rivers being akin to flow of water in the pipelines.

It is noteworthy that National Council of Applied Economic Research (NCAER) did a study on “Economic Impact of Interlinking of Rivers Programme” in April 2008. The Foreword to the study admits, “Economic impact of certain benefits such as mitigation of drought and floods to a certain extent, increased revenue/income from fishing, picnic site and amusement park are not taken into consideration.” It is clear from the NCAER report itself that livelihood aspects have not been considered by the project proponents.  

As to mitigation of flood and drought to a certain extent, fishing at dams and reservoirs, they are mentioned in passing as “fringe benefit” of the programme. Thus, all claims of drought proofing, flood proofing and dilution of pollution through linking rivers as is being argued by its proponent’s of ILR programme are insincere, an exercise in sophistry and totally misplaced. 

This is the study on the basis of which claims are made that the ILR project is viable. The fact is that the premise that the ILR project would lead to drought proofing and flood proofing of the country is based on the assumption that there is consensus among the states for this project. It has been found that both these premises do not exist.    

The study feigned ignorance about the relevant recommendations of the two volume report of the National Commission for Water Resource Development set up by the Union Ministry of Water Resources that was submitted in September, 1999. Volume-I of the report says: "The Himalayan river linking data is not freely available, but on the basis of public information, it appears that the Himalayan river linking component is not feasible for the period of review up to 2050." The report underlines that the problems are in the entire plan of linking the Himalayan rivers.

With regard to the Peninsular river component, the National Commission for Integrated Water Resources Development states, "there is no imperative necessity for massive water transfer. The assessed needs of the basins could be met from full development and efficient utilisation of intra-basic resources except in the case of Cauvery and Vaigai basins. Some water transfer from Godavari towards the south should take care of the deficit in the Cauvery and Vaigai basins."

Unmindful of the above recommendations of the High Powered Commission headed by Prof S R Hashim, Feasibility Studies of the links in the Peninsular Component of the Interlinking of Rivers project has already been prepared by National Water Development Agency (NWDA), Government of India. These links include:  1. Krishna (Almatti) Pennar Link, 2. Inchampalli Nagarjunasagar Link, 3. Inchampalli Pulichintala Link, 4. Ken Betwa Link Project, 5. Nagarjunasagar Somasila Link, 6. Parbati Kalisindh Chambal Link Project, 7. Srisailam Pennar Link, 8. Cauvery Vaigai Gundar Link, 9. Damanganga Pinjal Link, 10. Mahanadi Godavari Link Project, 11. Pamba Achankovil Vaippar Link, 12. Par Tapi Narmada Link, 13. Pennar Palar Cauvery Link and 14. Polavaram Vijayawada Link. The map of the peninsular component is attached.

As to Himalayan Component, NWDA has completed the pre-feasibility studies of fourteen links in the Himalayan component. These include: 1. Manas-Sankosh-Tista – Ganga (MSTG) link, 2. Jogighopa-Tista-Farakka link, 3. Ganga-Damodar-Subernarekha link, 4. Subernarekha-Mahanadi link, 5. Farakka-Sunderbans link, 6. Gandak-Ganga link, 7. Ghaghara -Yamuna link, 8. Sarda-Yamuna link, 9. Yamuna-Rajasthan link, 10. Rajasthan-Sabarmati link, 11. Chunar- Sone Barrage link, 12. Sone dam-Southern tributaries of Ganga link, 13. Kosi- Ghaghara link and 14. Kosi-Mechi link. The feasibility Studies of Ghaghara-Yamuna Link and Sarda-Yamuna Link has been prepared. 


Besides the above, Union Ministry of Water Resources has approved to identify Intra-State links in the States like Bihar and to prepare pre – feasibility / feasibility reports of these links by NWDA. The Government of Puducherry has send a proposal for one interstate link namely Pennaiyar – Sankarabarani link instead of intra state link proposal. The States Governments of Bihar, Maharashtra, Gujarat, Orissa, Rajasthan, Jharkhand and Tamil Nadu have proposed intra-state proposals within their respective states. NWDA is preparing the pre – feasibility reports of the intra state links.

 In Bihar, the proposed links include: 1. Kosi – Mechi, 2. Barh – Nawada, 3. Kohra – Chandravat (Lalbegi), 4. Burhi Gandak – None – Baya – Ganga Burhi Gandak 5.  Bagmati [Belwadhar]and 6. Kosi – Ganga. The pre-feasibility report of Kosi – Mechi, Kohra – Chandravat (Lalbegi) and Burhi Gandak – None – Baya – Ganga has been completed and sent to the state government. It shows that centre and the state government refuse to learn from the embankment disaster and drainage crisis in the Kosi basin.  Notably, Modi promised the false solution of ILR to deal with the situation during a recent rally in Bihar.  

In Rajasthan, there are two links proposed namely, Mahi – Luni link and Wakal – Sabarmati – Sei – West Banas – Kameri link. Is it irrational to suggest that centre and state government should learn its lessons from the flash floods of August 2006 in the usually drought prone Barmer district and desist from such endeavors?

In Jharkhand, the links include South Koel – Subernarekha, Sankh – South Koel and  Barkar – Damodar – Subernarekha. Their pre-feasibility report has been completed and sent to the state government. The centre and the state government have chosen to discard the lessons from the failure of the hydro projects in the Damodar valley. In Tamil Nadu, there is a proposal for Pennaiyar – Palar link.

In Maharashtra, there 15 links which include 1. Wainganga (Goshikurd) – Nalganga (Purna Tapi) [Wainganga – Western Vidarbha & Pranhita – Wardha links merged and extended through Kanhan – Wardha link], 2. Wainganga – Manjra Valley, 3. Upper Krishna – Bhima (system of Six links). 4. Upper Ghat – Godavari Valley, 5. Upper Vaitarna – Godavari Valley, 6. North Konkan – Godavari Valley, 7. Koyna – Mumbai city, 8. Sriram Sagar Project (Godavari) – Purna – Manjira, 9. Wainganga (Goshikurd) – Godavari (SRSP). 10. Middle Konkan – Bhima Valley, 11. Koyna – Nira, 12. Mulsi – Bhima, 13. Savithri – Bhima, 14. Kolhapur – Sangli – Sangola and 15. Riverlinking projects of Tapi basin and Jalgaon District. Clearly, centre and Maharashtra government has not learnt its lessons from disrupting Mithi river in Mumbai. 

In Gujarat, the proposal of Damanganga – Sabarmati – Chorwad link is facing people’s resistance. Will Nareendra Modi pay heed?  

In Odisha, the links included Mahanadi – Brahmani but its prefeasibility study concluded that it was not techno economically feasible. Other links in the state include Mahanadi – Rushikulya (Barmul Project) and Vamsadhara – Rushikulya (Nandini Nalla project).

The tripartite Memorandum of Understranding (MoU) amongst the Union Government, the State of Gujarat and the State of Maharashtra for preparation of the Detailed Project Reports (DPRs) of Damanganga – Pinjal Link Project and Par – Tapi – Narmada Link Project was signed by the Union Minister for Water Resources, the Chief Minister of Gujarat and the Chief Minister of Maharashtra on May 3, 2010 in the presence of the Prime Minister. It was claimed that the agreement for these two links is meant for providing benefits to the people of the areas at the earliest. 

The proposed Par – Tapi – Narmada and Damanganga – Pinjal links are two Inter Basin Water Transfer links concerning Gujarat & Maharashtra. While Par – Tapi – Narmada link is for claimed benefits in Gujarat State, Damanganga – Pinjal link is expected to benefit Maharashtra State according to the project proponents. 

The origin of these projects can be traced to a study by Government of Gujarat in 1973 that contained a proposal to inter-link the rivers of the state and the “National Perspective for Water Resource Development -Master plan of Gujarat for utilisation of surplus water of west flowing rivers south of Tapi” of 1981. The proposal envisaged a link canal interconnecting the Damanganga, the Tapi and Narmada rivers. Those were times when Barmer like incident had not happened and climate science was not adequately developed.

In order to comprehend the claims of rivers being “surplus” take the case of Ganga which is deemed as a "surplus" trans-boundary river from which water is planned to be removed to relieve flood by means of barrage-canal works for transfer to Subarnarekha-Mahanadi-Godavari-Krishna-Pennar-Cauvery. The latter rivers’ flow during monsoon flood is at the average rate of 50,000 cumecs. This will create an ever present disaster. If the flood is to be relieved, water in substantial quantity needs to be removed by means of the link canals that will "be 50 to 100 m wide and more than 6 m deep", according to government's website explaining the modus operandi of "benefits." When a 10 m deep 100 m wide lined canal can at most carry about 1,500 cumecs of water, that would relieve flood only to the extent of 3 per cent and that too only downstream of the canal. This is the landscape in which water from so called “surplus” rivers is to be transferred to so-called deficit rivers.

The Par – Tapi – Narmada link envisages the transfer of surplus water from west flowing rivers north of Damanganga upto Tapi to water deficit areas in North Gujarat. The scheme is located mainly in southern Gujarat; but it also covers part of the areas, north of Mumbai on the Western Ghats in Maharashtra.

Damanganga – Pinjal link envisages the transfer of surplus water of Damanganga basin available at the proposed Bhugad and Khargihill dam sites to Pinjal reservoir for augmentation of water supply to Greater Mumbai city. All the three reservoirs will be connected through tunnels i. e. Bhugad – Khargihill (length 16.85 Km) and Khargihill – Pinjal (length 25.70 Km) for the transfer of about 909 Million cubic meter of water annually. 

The unintended consequences of fiddling with river’s ecosystem have not been factored in. In the case of Gujarat’s Par – Tapi – Narmada link project consists of 7 proposed reservoirs on these rivers and a 395 km long link canal. This link would submerge tribal lands and forests in south Gujarat. These proposed reservoirs include Jheri, Mohankavchali & Paikhed on Par River, Chasmandva on Auranga River, Chikkar and Dabdar on Ambica River and Kelwan on Purna river and a 401 km long link canal connecting these reservoirs. Four of these reservoirs namely, Jheri, Mohankavchali, Paikhed and Chasmandva will submerge territory and property in Maharashtra.  Jheri reservoir is completely in Maharashtra whereas other three reservoirs submerge the areas in both the states of Gujarat and Maharashtra. The MoU does not reveal as to whether people of Maharashtra would agree to submergence.

There is strong people’s opposition to the link since 1990s. The resistance opposition has been officially noted. The project proponents claim that the reservoirs envisaged as part of the river link project will provide flood relief to the people residing in downstream areas. These claims are not verifiable because information about existing floods, flood damages and the impact of the project on floods has not been factored in.

Since the days of Indira Gandhi efforts have been made by some lobbies to undertake these link proposals as part of inter basin and intra basin transfer of water mentioned in the national water policy. 

It is abundantly clear that short-term and long-term impact of such failed ideas has not been taken into account. People’s movements and environmental groups in India in particular and South Asia in general are opposed to this project because it will lead to Aral Sea like ecological disaster and will endanger the life of rivers for good. It is a case of refusing to learn from the diversion of two Siberian rivers led to drying up of Aral Sea. Will Modi consider paying a visit to Aral Sea to witness the outcome of his promise? Has the far reaching implications of the project on relations with neighboring countries in the Himalayan region been factored in?

MP CM too is on the prowl  
In a highly controversial act, the so-called river-linking project that claims to solve the problem of water scarcity in Malwa region as part of the Narmada-Kshipra link project has been completed and inaugurated without Environment Impact Assessment (EIA) and Environmental Clearance. Narmada's water has been lifted to 350 metres and through pipelines spread over almost 49 kilometres to Kshipra river in Ujjain, about 15 kilometres from Indore. The first phase of the project has been completed in 14 months. It was inaugurated by L K Advani in February 2014. Modi’s absence from the program and its advertisements was quite conspicuous. The project has three more phases which will connect river Ganga to three rivers - Gambhir, Kalisindh, Parvati. Malwa region. Chief Minister Shivraj Singh Chouhan claims, "When all phases of the project are complete 3,000 villages, 72 towns will get drinking water and water to irrigate 16 lakh acres of land." 

It has been claimed that the project will provide drinking water to Dewas and Ujjain cities, over 250 villages along Kshipra river, supply water to Ujjain, Dewas and Pithampur and also recharge groundwater.
But 25% of the 362 MLD water to be pumped under this scheme is going to be transferred to Pitampur industrial area in Malwa under an agreements that has already been signed with Delhi Mumbai Industrial Corridor. This is revealed in an elaborate note titled “Hype vs Reality of Narmada Kshipra Pipeline Project” published by South Asia Network on Dams, Rivers and People. This leaves the question- Who will get how much water-unanswered. This information is not in public domain.

This pipeline project involves pumping through 47 km long pipes that would raise the elevation of water by about 348 m from Sisliya (228 m) to Ujjaini (576 m) through pipelines of 1.8 m diameter. This involves use of at least 27.5 MW of power. The power bill of this project would be Rs 118.92 crores per year.  

Notably, about 4 lakh liters of polluted water is entering the Kshipra river from Dewas city and industries, affecting villages of Ujjain, Dewas and Indore and Hirli dam and even groundwater. The pumping of pipeline water into the polluted Kshipra water will generate more quantity of polluted water. 

Interestingly, Kshipra river is part of Ganga basin under the ILR programme is a so-called surplus basin and Narmada is a so called deficit basin, which is supposed to get water from Gujarat’s Par and Tapi rivers.  It is evident that there an unbridgeable gulf of communication between Modi, Chouhan and Advani. The MP project by default reveals that the assumptions about ‘surplus’ and deficit which is the basis of ILR project is totally flawed. 

Two Questions
Aam Aadmi Party leader Arvind Kejriwal recently asked Narendra Modi some questions. Two of them pertain to Gujarat’s river water management and agricultural growth.
1.       1. You claim that agriculture growth rate in Gujarat is 11%, but by your own government's estimates in 2006-2007 agricultural production in the state was Rs. 27,815 crore. In 2012-2013, agricultural production fell to Rs. 25,908 crore. This means agricultural production has fallen in Gujarat during your tenure and the annual agricultural growth rate is -1.18%. How do you then claim agriculture growth rate is 11%?
2.     2.  The height of Narmada Dam was raised in 2005 to provide water to the people of Kutch for drinking and farming. But, even eight years later, the people of Kutch have not got water. This water was given to some of your favourite industrialists. Why this discrimination against the people of Kutch?

Gopal Krishna

This article has been published in ECO magazine from page no. 36 to 39 at
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