How many times have you heard, including in the various courts the case has been in, the view expressed that the Ambani brothers should go in for mediation, preferably with their mother involved – tumhare paas maa hai, uske paas jaao na! Sounds pretty funny doesn’t it, after all it’s precisely because the brothers couldn’t resolve their disputes, with or without maa that they’re in the courts for so many years.

But more than that, even in the extremely unlikely event of the two brothers wanting to conciliate, they cannot and that’s where Petroleum Minister Murli Deora comes in. It’s best to break up the case into two parts to figure this out.

Basically, as part of the family settlement that’s now supposed to have been signed by Mukesh Ambani as Mukesh Ambani and not as Reliance Industries’ chief, the two brothers agreed on the supply of gas from the KG Basin to Anil Ambani’s power plants. This mentioned the amount of gas (28 mmscmd) and the fact that the terms would be similar to the ones RIL had signed with NTPC – that is, for 17 years and at a price of $2.34. So far, all clear?

In late 2005/early 2006, when Reliance Natural Resources Limited was still controlled by RIL, a board meeting was called and a board resolution passed on the agreement – since this, according to the Anil Ambani group, put lots of caveats on the gas supply, its director on the company (JP Chalasani) objected but was overruled since the other two directors were Mukesh Ambani loyalists. A few days later, RIL executives signed the agreement with RNRL – except they signed it on both sides, that is they also signed on RNRL’s behalf. This is what Anil Ambani went to court on – that the contract did not reflect the spirit of the MoU and this is why the MoU keeps coming into the picture. This is why the courts keep asking how, if Reliance Industries is challenging the MoU, the Reliance empire got carved up … but that’s another story.

Working out a settlement to ensure the contract reflects the true spirit of the MoU presumably is something that has a chance, even if similar to that of a snowball in hell, of getting settled between the two brothers. Here’s where Murli Deora comes in.

Apart from the issue of the MoU and the contract, there is now the issue of whether RIL even has the right to sell the gas it gets from the KG Basin. At the time RIL signed the Production Sharing Contract (PSC) for the KG Basin gas with the government, at the time it signed the contract with NTPC and RNRL, the PSC was quite clear that RIL had all the freedom to enter into such contracts. But when the fight between the brothers escalated, the ministry said RIL could not sell the gas without its permission. The government then repeated this in various affidavits in various courts – though the Group of Ministers’ minutes clearly said their decisions did not apply to existing RIL contracts with NTPC and RNRL, the government is firm that it alone controls who will get the gas and at what price.

So even if the Ambanis decide to bury the hatchet, how does one take care of the government’s view that RIL has no rights to sell gas without its prior permission? Or is everyone assuming that once the brothers settle, the government will automatically reverse its stand?

Tells you just how low the government has fallen in everyone’s esteem.

I met up with an old friend who is one of the myriad spokespersons the BJP has, and asked him what the party’s view was on the fight between the Ambani brothers. Why should we have a view, he said, it is a dispute over who gets the spoils, how do we come in?

Well, for one, I pointed out, it would make a welcome change from the party’s stance of dealing with issues that aren’t exactly contemporary – Bofors is over 23 years ago, and the Jinnah controversy older than even the Partition! A look at the country’s demographics should make it pretty obvious the number of people born after Partition is so large, Jinnah has less than zero recall value. As for Bofors, how long are you going to flog it?

But more important, look at the amounts involved and the people – it makes Bofors look like child’s play. There are allegations of favouritism, of a huge impact on the exchequer and, more important, a fight between a public sector company and India’s richest man – where the public relations advantage lies is pretty much of a no-brainer.

Anil Ambani’s calculations of the profits Reliance Industries Ltd (RIL) will make or how miniscule the government’s share will be may be off the mark, but that’s not the point. Forget whether Mukesh Ambani earns more or Anil Ambani earns less and how much this amount is. Concentrate on the fact that RIL won a contract with NTPC to supply it a certain amount of gas and then refused to supply it. The government, instead of forcing RIL to honour its commitment, has bent over backwards to try and scuttle NTPC’s case arguing the deal was never completed and, on another occasion, that RIL did not have the mandate to even participate in the NTPC tender since it had not asked for the government’s prior permission. Just imagine, I asked my friend, the impact of the BJP going to town with this – the public sector company that is responsible for some of the cheapest power in the country is not getting the fuel it needs to supply more; and the reason for this is the government wants to side with the country’s richest man. It has taken Anil Ambani’s public shaming of the government for the latter to even constitute a group to look into the matter and make assurances that it will take action to protect NTPC’s interests – it has been several days already, though, and there is no sign of  this action being concretized. Just imagine what an Arun Jaitley, the party’s great new hope, at least according to himself, could do with this.

Or consider the stuff about RIL’s capex for the KG Basin. In this case, after Anil Ambani came out with his ads alleging huge padding of costs, the government went into overdrive to debunk these claims – the higher the capex, the less the share of profits that the government gets from the KG Basin gas. The Director General of the Directorate General of Hydrocarbons came out with his defence – he said independent experts had been consulted on the matter and that the Comptroller and Auditor General of India (CAG) had already audited the data. Turns out, thanks to Anil Ambani’s sleuthing, the two independent experts had some links with RIL. And, far more damaging, the CAG said it had never audited the RIL data since it never had access to its balance sheets. It’s possible there’s nothing wrong with RIL’s capex costs, but just imagine what a clever lawyer, leave alone one of the caliber of Arun Jaitley, could do with the obvious gaps in the DGH’s statements on the matter.

I think it is a good idea, especially for those who vote BJP, to send in email asking for an invite to the formal burial of the BJP. You can then move on instead of having to wait forever for the comatose party to revive.

You have to hand it to the Delhi Metro Rail Corporation (DMRC). A few days after the girder fell due to the defective pillar near Lady Shri Ram College in south Delhi, DMRC’s PR department sent a mail to journalists giving pictures of a similar accident in South Korea! Complete with pictures and the urls of the wire services from where the stories had been sourced. Accidents happen!

Around the same time, DMRC chief E Sreedharan was speaking to The Indian Express’ editor Shekhar Gupta on NDTV’s Walk the Talk and to tell him that all manner of checks were being employed, he said various reputed consultants had also been hired. Shekhar asked him to name these consultants. Sreedharan did. The name he mentioned was Professor Tandon, a man he had worked with for 30 years. If Shekhar were to do another Walk the Talk today, he’d have to ask him the obvious question – but isn’t this the same Tandon whose firm you’ve now held guilty for doing a shoddy job and you’ve debarred for two years?

Cut to another picture, of the Comptroller and Auditor General (CAG) doing a report on DMRC, a report which said (http://www.business-standard.com/364349/) DMRC watered down its standards to meet deadlines, it accepted tests which were not conducted with its people present, it changed contract specifications after the tenders had been won, it didn’t keep test records, and so on. The CAG has pretty specific allegations, but DMRC responds to them with generalities like the specs haven’t been watered down and all tests were conducted correctly! Other DMRC sympathizers reacted by heaping contempt on the CAG … what does it know, the CAG’s full of just accountants, drain inspectors and the like (read BS’ letters’ columns for some of these letters). Well, it does look like the CAG did know something, doesn’t it?

What is it about DMRC that makes it so cocky and about us that makes us to willing to take all this with such little protest? A couple of deaths on the Bus Rapid Transport Corridor and The Times of India can’t write of the corridor without prefixing the term ‘killer’ to it. The noise is so much, the city’s chief minister decides to change the basic design on the corridor and move it from the centre of the road to the side! But we’re willing to accept Sreedharan’s word for everything!

The same man who told Shekhar of the great supervisory structure in place has this to say about the accident:

• Two major causes of the accident are design deficiencies and material deficiencies.
• The committee has found that the cantilever design has not adequately taken care of various forces and hence there is deficiency in provision of steel at critical points and the reinforcement detailing suffer from major deficiencies.

There’s then some stuff about how the concrete was ‘well-compacted’, whatever that might mean – presumably that means don’t worry too much about it. But right after that, ‘However, based on tests carried out on cores taken from the pier and cantilever, it has found that the concrete fails to meet the strength criterion by a wide margin.’ Make of that what you will. The committee, DMRC’s press release goes on to say, ‘lack of curing might be the reason for the low concrete strength’ (for some reason, the actual report of the probe committee is not being made available by DMRC).

Now here’s the question, after such an accident, and after such a probe report, would we have just accepted that the organization executing the project would take care of it? Would we accept that the organization will now get all designs checked by an independent agency and think that this was enough, especially if the organization responsible was so blasé as to say, ‘Metro structures are completely safe and the checks being carried out now will remove even small deficiencies, if any’. We’re talking of design faults and of basic work like curing concrete not being done properly – problems which DMRC says are major deficiencies – and the release still has the gall to talk of ‘if any’ deficiencies!

There are two or three major reasons for our acceptance. One, since our politicians/bureaucrats cripple every organization under their control (see what happened to the NHAI in the last five years after the NDA demitted office), Sreedharan is one of the few people who have delivered. Two, Sreedharan’s structure (a 50:50 jv between the central and state governments) ensures that no one is really in charge of the project – which is why neither the central nor the state government has chosen to appoint a committee to see what went wrong or appoint someone to supervise the project. Three, we’re obsessed with concrete … so we get very impressed with each concrete pillar that comes up, not realizing that nowhere in the world does a metro address the travelling needs of more than a very small fraction of the population.

But this piece is not about the merits of a metro vis a vis a bus corridor, it’s about something else. And that’s the need to hold people accountable. It’s about the need to put in place enough checks and balances to ensure work is supervised properly, especially when it involves the safety of people and when it involves large amounts of public money.

It has to be said in defence of our politicians, though, that they’re pretty even handed. When BSES made a hash of Delhi’s power supply, and continues to do so, Chief Minister Sheila Dikshit didn’t do much either, apart from issuing what the media routinely describes as a ‘stern warning’. In this case, the warnings weren’t stern, indeed people like Dikshit and Rahul Gandhi begged Sreedharan to stay. But then a halo that big does deserve some concessions, doesn’t it?

That’s the question most are asking of new Human Resources Development Minister Kapil Sibal. Getting rid of the 10th class board exams has gone down very well with the kids (my 12-year old says he loves ‘Kapil-uncle’ even though he’s never seen him, even on TV!), but it’s not necessarily a good thing. The 10th Board may have added to pressure, but it also gave kids a fairly good idea of just where their skills lay (or didn’t lie, more accurately)… with the Boards abolished, I bet schools will be pressured by parents to allow their children to study ‘science’ till the 12th, even though it’s obvious they don’t have the aptitude for it. And I don’t see how it helps if, as Kapil Sibal wants eventually, even the 12th Board is abolished and, instead, kids just give an entrance examination for university, much the same way those wanting to do an MBA sit for the CAT. One exam is being replaced by another, that’s all. And what happened to the vocational studies after the 10th which was the original reason for the 10 + 2 system … basically those who wanted to study beyond the 10th would do so, the rest would do vocational stuff … secretarial courses, windows, carpentry and so on. Since the vocational training never happened, why not just go back to the old 11 years in school?

There are a million other such questions being asked of Kapil Sibal and his enthusiasm to implement the Professor Yashpal report – if someone like Kaushik Basu should dissent from the other members of the committee, it has to be for a good reason (Disclosure: Kaushik was one of the best teachers we had in DSchool back in the mid-80s). Plus, it’s still not clear, even after having gone through all Sibal’s interviews and press conferences, how he plans to deal with the issue of getting better quality teachers, higher salaries for them, genuine autonomy for colleges/schools. Is he saying the government, and his ministry in particular, will not appoint the next chief of the IIM Ahmedabad, or that the next vice chancellor of Delhi University will be decided by the university itself?

Maybe Kapil Sibal doesn’t get it in quite the same manner that educationists like Kaushik Basu or people like Pratap Bhanu Mehta (he’s the head of the Centre for Policy Research and resigned from the National Knowledge Commission) who’ve spent a lifetime looking at such issues. But no one person agrees with everyone else (think Kaushik and Prof Yashpal), so why hold this against Kapil Sibal? The minister’s understood a few basic things, and he’s got them absolutely right.

One, since you can’t resolve everything, focus on just a few things. Two, most of the problems we’re seeing today are related to poor quality of supply. So, Sibal’s solution is to create more supply! Once you do away with the UGC granting clearances for universities and come up with some basic criterion which people who want to set up universities must meet, the supply response will be great – by way of example, most of the big software companies, like TCS or Wipro, run mini-universities anyway even today for their staffers, so if one of them wants to set up a full-fledged university, it shouldn’t be too difficult.

In an ideal world, Sibal should give Delhi University autonomy and concentrate on getting it back to shape. But that’s like attempting for the moon. Why not create another university, or a group of classy colleges, that will give Delhi University a run for its money? To understand this, let’s use the telecom example, since that’s an area I understand.

In the mid-1990s, BSNL was your only choice if you lived outside of Delhi and Mumbai. So, if you wanted top quality phones, you’d ask the same questions you’re asking about Delhi University. Will the government ever free up BSNL, allow it to hire top-class professionals at market-salaries and so on? The government didn’t do it then, and it won’t do it now, or if the UPA has its way (as you can see, I’m an NDA fan!), ever. But what happened? Bharti came up and took up that space! And now it is really irrelevant whether BSNL survives or not. Of course it’s a tragedy that BSNL is being suffocated the way it is, but we can either spend the rest of our lives trying to fix it and run up against all manner of obstacles or simply circumvent the problem – it’s a bit like a bypass surgery. By the way, that’s precisely what Dr Manmohan Singh tried to do in the early 1990s – to create more supply. Of course there will be problems, but just the presence/threat of new supply will also fix a lot of things.

Will the new accreditation system Sibal has in mind for universities help? Basically, much like in the US, you’ll be able to choose your universities on the basis of scores some independent evaluating agencies give. You have to be naïve to think it’ll work flawlessly – arre, the financial mess we’re in is largely the result of ‘independent’ credit rating agencies colluding with financial institutions. But it’s not as if the current evaluation system is flawless and doesn’t throw up charlatans. So, we’ll have to come up with ways to ensure the raters don’t get captured by those they’re rating.

Short point is that there is no final solution to anything, at least if you’re not like Hitler, or Sanjay Gandhi. So, give Sibal’s plan a chance. He’ll get a lot of things wrong, and won’t be allowed to go ahead with a lot considering education is a concurrent subject, and he hasn’t thought through a lot of things… how do you square the demand for reservation with institutions of excellence, for instance? And, as we’ve learnt to our horror, if you don’t get the detail right, the whole plan goes for a toss… the best-laid plans of men and mice, and all that. But anyone whose plans centre around creating more schools/colleges has clearly grasped the main point.

A confession first: I wasn’t a great admirer of Dr Manmohan Singh, Mark 2 (in his first avatar as the country’s finance minister, he was a completely different person). He did precisely nothing for the economy in terms of reforms and if growth picked up during his tenure, it was largely driven by the global upsurge. Indeed, he constantly tried to paper over the fault lines in the government and was quite content to allow the most brazen of corruption to flourish under his stewardship – and yet claim moral superiority. So, to start with, my expectations of Dr Singh Mark 3 are somewhat on the low side.

Which is why it comes as a really, really pleasant surprise to see Dr Singh stand up and tell the DMK to go take a walk. Of course, it’s always possible, even likely, that Dr Singh, or Sonia Gandhi, will come around and will make some concessions to the DMK, but it’s a positive sign.

There can be little doubt that Dr Singh’s last tenure was marred with charges of corruption and rampant favouritism. While this applied to many ministers/ministries, there were three or four that stood out quite distinctively. There was Praful Patel in the aviation ministry who was pretty much able to hand out as much largesse as he wanted to airport developers; there were the DMK lot led by A Raja (Raja alone, in one deal, gave away $10 bn, or Rs 50,000 crore, to a handful of favoured firms while Dr Singh consoled himself saying nothing could stop an idea whose time had come!); and there was Murli Deora who bent over backwards to help Reliance Industries. Since Deora is a Congressman, and a very loyal one at that, it’s fair to say there is nothing he did that was not sanctioned by either Dr Singh or by Sonia Gandhi.

So, if Dr Singh is even remotely interested in providing a less-blemished government this time around, Sonia Gandhi has to allow him some room for manoeuvre. This is precisely what she has done, at least so far.

What if they patch up, and the DMK gets its pound, several pounds, of flesh? And, we should make it clear, this has little to do with the actual ministers – it is no one’s case that Raja was not doing what his party chief in Chennai wanted. So, it may be an Azhagiri or a Kanimozhi who becomes the telecom minister, the net result will probably be the same. If the DMK gets its choice of ministries, and telecom is seen as the bellwether one here, it will signal that Dr Singh’s ready to play the compromise game to the fullest.

But even if the DMK is given the ministries it wants, this doesn’t necessarily mean the same thing it did the last time around. Last time, the DMK could do pretty much as it chose, so could Praful Patel. This time, with 200+ seats of its own, and another 100 pledged in letters of support with the President, Dr Singh can afford to tell a DMK minister just where to get off. So, he can let the party play its little games here and there (like the type the BJP alleged Raja had done with the BSNL Wimax contract), but stop it when it decides to hand over $10bn at will.

The onus for this, of course, doesn’t rest solely with Dr Singh. The opposition parties need to be alert and draw attention to this. Sadly, this is just not happening. The BJP made a huge noise over a small Wimax tender but kept painfully quiet when the $10bn was being handed out. This, of course, why no one buys its Bofors or Swiss money trails anymore, though my friend Tarun Vijay has passionately argued against this in today’s ET. Tarun’s view is that the BJP had all the right ideas/concerns, but just failed to communicate this to people. Tarun’s wrong, the BJP’s only got tired ideas and no one has time for tired ideas anymore. There’s a whole generation out there who go to Wikipedia each time they hear Bofors and Quattrocchi, so who’s the BJP appealing to?

To get back to Dr Singh, the concept of a clean government is an idea whose time has come. Has the real Dr Singh’s time come?

Now that five years of the UPA are over, what has it achieved? In terms of growth, we’re now worse off, though it’s unfair to blame the government for this since both the rise and fall were very largely driven by global developments, as well as our own business cycle. In terms of deficits, of course, it’s a sad story that can’t be blamed on global developments since the current cycle of fiscal profligacy began before global crisis started affecting us. But this blog is about infrastructure, what are the lasting achievements of the UPA on this front?

On the face of it, many. Two spanking new airports ready at Bangalore and Hyderabad, the ones at Delhi and Mumbai are in the middle of getting completed; we have four Ultra Mega Power Projects which have been bid out and which, over a period of time, will get commissioned; several intra-city metro projects along the lines of the one in Delhi are on their way to getting completed; the list goes on.

It can be no one’s case that infrastructure development is an easy task – recall that none of the so-called ‘fast-track’ power projects talked of in the early 1990s came to fruition despite the combined will of the central government behind them. So each one of the projects just cited is an important breakthrough. The problem, however, is that the UPA has not been able to put in place a mechanism that puts development on the automatic track.

Sorry, I need to amend that. The UPA put in place a mechanism for ensuring infrastructure development was on the automatic track, but it was equally quick to rescind it. So, to ensure that, for instance, only the best developers in the world developed infrastructure in India, and to ensure top-notch firms were not eliminated at the technical evaluation stage (which very often happens), it came up with an evaluation sheet which was an objective one – how many airports have you built before, what traffic did these airports have, how many highways have you built etc. (In the Delhi and Mumbai airports, you’d recall, the technical evaluation was rigged so that just two firms qualified – this new method was meant to stop this from continuing.) So what happened to this? In the case of the highways projects, for instance, it was junked. And, thanks to a minister of whom the less said the better, the great progress made during the NDA years has ground to a halt.

Similarly, when the Railways wanted to build some locomotive and coach factories on its own, it took a long battle to get the Railways to agree to get this done through the PPP route – 74 per cent private, and 26 per cent Railways. Initially, the contracts were completely loaded in favour of the private firms; they were then changed, and loaded in favour of the Railways! With great difficulty, and over a year, the contracts were rescued and brought back to being neutral. The bids were called for and, after a stormy Cabinet meeting, the Railways decided to reject the bid and go ahead and make the engines on its own!

A spanking new Electricity Act was brought into place. This promised a telecom-type revolution. Users like you and I would be allowed to buy electricity from whoever we wanted. So, while the electric wires coming into our houses may have been owned by Reliance Infrastructure, we could ask the Tatas to supply us power – so so many suppliers competing for our custom, as in telecom, prices were supposed to fall. What was the result? In the six years or so that the Act has been in place, there hasn’t been even one instance of a consumer being able to buy power from a third party using what’s called ‘open access’. If you’re a power plant with surplus capacity, and want to sell that power to a third party outside the state, the government doesn’t give you permission to do so – to prevent the electricity from going waste, you then sell the electricity to the government utility in the state, and that utility then sells it outside the state, and pockets the profit. Today, peak power shortages are higher than they’ve been in the past.

As for the airports and the new ports that have been privatised, there’s a new problem. They’re very high cost. In the four new airports, new user charges of around Rs 300 or so for domestic flights is what’s charged and it’s around Rs 1,200 for international flights. In the Nhava Sheva port, a study found users were being charged 80 per cent more! In short, the way the contracts were drawn up and implemented, we’ve got into a very high-cost structure which, in the long run, will kill the industry itself. In the airports, like Delhi, thousands of crore of land has been gifted away almost free to the developer – the Delhi airport has been a long-standing scandal and, if you like, I can give you the urls of some pieces I’ve written on it.

As for the regulators who’re supposed to look after the consumers’ interests, most of these bodies have been captured by bureaucrats and, with perhaps no exception, they’ve, by and large, worked to further the interests of private firms whom the government of the day is in favour of. The corruption is a separate story and, if you’re interested, I’d encourage you to pick up a copy of the latest annual BS Books issue – a chapter called Regulatory Roulette has many of the details.

In a nutshell, as the UPA departs, there’s little to show for the work it has done in the infrastructure space. Which is a real pity since this is one area where the Prime Minister’s closest aide Montek Singh Ahluwalia was personally involved in.

Now that election season is upon us, we’re going to be subjected to the usual rhetoric on caste discrimination – we’ve already heard the great Varun Gandhi’s vitriol on the other religious kind of rhetoric (it’s a moot point whether the BJP which is desperately looking for allies would pushed into supporting Varun only because the Election Commission’s actions made him a national hero). So, while getting in her Brahmins, Mayawati will go on about how she will get the Dalits a better deal; Lalu Prasad will do the same for the OBCs; and so on.

But how real is the discrimination and, to that extent, how much has electoral representation helped alleviate this? That is, are the OBCs in Bihar any better for having had Lalu and family in charge of the state? There is the argument that Lalu being in power gave the OBCs a ‘voice’ – they can now go and report a crime against them in the police station, for instance – and ditto for the Dalits and Mayawati, but I’m not sure how far you can live on ‘voice’ if it doesn’t get followed up quickly enough with some income. If it did, Digvijay Singh would never have got voted out in Madhya Pradesh.

Unfortunately, the data on political representation is too scanty to arrive at a firm conclusion – we know, for instance, that Mayawati is a Dalit leader but if 50 per cent, say, of her MPs/MLAs are Brahmins, we can hardly put that down as Dalit representation, can we? Apart from the reserved SC/ST seats, there is no data on what proportion of MPs/MLAs are from different castes. That’s clearly the subject of a PhD thesis or two, given that it can’t be too difficult to figure out the castes of a few thousand MLAs/MPs based on their surnames. On the face of it, though, the evidence is likely to show that political representation doesn’t make more than an iota of a difference. The average income of OBC households across the country is around Rs 60,000 (I’ll come to how I know that in a minute) while that in Bihar is just two thirds of that at Rs 41,000. Assuming, and I’d appreciate it if political scientists gave me more information on this, that most of Lalu’s MLAs were OBCs, this is as clear a rejection of the political-representation-helps’ thesis.

Take the other argument made, while talking of the need for OBC reservations a few years ago – OBCs are 33 per cent of the population (in later NSS surveys, more castes were added to the OBC list and so the proportion of population shot up to over 40 per cent) but they’re just 24 per cent or so of what are called ‘professional’ jobs. Clear evidence of ‘discrimination’. Economist Surjit Bhalla looked at the data from the government’s own National Sample Survey (I wrote up the stories in this newspaper) and it turned out there was no discrimination. Here’s why: OBCs were 32 per cent of the population, but they were just 26 per cent of those who’d passed high school … the rest of the numbers pretty much flow from this one – the OBCs were 24 per cent of those who were enrolled in colleges and 24 per cent of those in professional jobs. So, if there’s a problem, it lies in the proportion of OBCs passing out of schools, it is not in reservation in colleges or in jobs.

My friend Rajesh Shukla who is the Chief Statistician of the National Council of Applied Economic Research (the only organisation in the country to do a large annual income survey) and I are, in fact, working on a data-based book on income/expenditure/savings patterns of various castes in the country – hopefully, we’ll be done in a couple of months. While it’s early days yet, what’s interesting is that for most areas – income/expenditure/etc – the caste factor is a lot less important than others.

A sneak-peak at one or two sub-heads in the book will give you some idea of what I’m saying. Take the income levels of those working in agriculture. SC/ST families here have income levels that are around half those of the upper-caste Hindus, but break this up into land-ownership, and you’ll find this is what accounts for much of the difference. If you’re still not convinced, look at the income levels of those employed in the modern services sector – the income levels of SC/STs is broadly similar to that of the upper castes! I could go on, but you get the picture – the SC/STs in modern services are as educated as the upper castes are, and this is what is primarily determining salary/income levels.

So, if you’re interested in reading about this kind of stuff, do write in, book your copy now, and that kind of stuff!

Two things have really bugged me over the week – the fact that the Mumbai airport also wants an Airport Development Fee (ADF) and that the Railways was allowed to go ahead and set up a diesel locomotive factory on its own despite getting a lower quote from a private sector firm. There’s no real link between them except that both make a mockery of the whole system of getting global bids, of transparency, and stuff like that.

Take the Railways case first. I’ve written about this earlier in my column “Getting PPP back on track”. Very briefly, the Railways wanted to set up two factories, one each for diesel and electric locomotives; the tenders moved from the extreme of being very favourable to the bidders to being extremely unfriendly, before they were fixed; there were no bids for the electric loco; there was one bid for the diesel one from General Electric of the US, a bid that was lower than what it would have cost the Railways if it were to build on its own, but the Cabinet allowed it to reject the bid and instead set up the loco factory on its own. In which case, you can expect the usual cost and time overruns that plague all PSU projects – a start has, of course, already been made since the Railway Minister has even decided where the plant is to be set up!

I met a very senior bureaucrat last night, and he put a totally different spin, one that’s even more worrying. He argued that turbines supplied by General Electric to the Dabhol power plant continue to malfunction, and GE is most reluctant to take responsibility for them. While the original Dabhol plant asked GE to give a performance guarantee, when the government entered into a renegotiation and restarted the plant after paying GE and Bechtel around $300 mn for their share of Dabhol’s equity, it did not insist upon a similar guarantee!

The government even brought this matter up with GE’s global chief, but clearly to no avail. So why aren’t we penalising GE, he argued, making it clear that it cannot expect more government business unless it takes responsibility? Why not indeed?

Relate this now to the agreement the US signed recently with Swiss bank UBS. The US has got UBS to agree to give it details of US citizens who’re dodging US taxes using UBS. Why doesn’t our government do something similar, given how Indians are supposed to have stashed away more than a trillion dollars (that’s India’s entire GDP by the way!) in Swiss banks. I mentioned this to another senior bureaucrat, from the finance ministry, at the same party. Since there were other guests around, he loftily told me that the government got all the details it wanted, only these were not publicised the way the US did! If that’s true, how come there’s been no sign of this wealth being taxed? Certainly the tax numbers don’t show this. Once again, a sign that the government just continues to pander to corporate interests.

The best, or worst, example of this of course is what’s happening on the Delhi airport and how this is now to be extended to other airports. The GMR Group won the bid for the Delhi airport by promising to share 49 per cent of topline revenue with the Airports Authority of India (AAI). It was obvious this was going to fail since you can’t share 49 per cent of your topline and still hope to make money, but anyway. Soon enough, GMR redefined what topline was, and came up with a proposal to take deposits which were not going to be shared with the government – to the government’s shame, it okayed this. As a result, the AAI share of revenues fell by 20-50 per cent, depending on what real estate values are. Anyway, given the real estate slump, GMR couldn’t raise enough deposits, so the government has allowed it to charge an Airport Development Fee by charging a few hundred rupees to everyone who flies.

Now other airports, like the one in Mumbai want to levy a similar fee.

Why bother to have agreements if you can just flout them in this manner? Indeed, it’s best to offer to share 99 per cent of revenue, win the contract, and then renegotiate it the way GMR has. After all, if the airport has to be completed, or a road has to be completed, the government will agree to anything.

By the way, this is not some fanciful stuff from the top of my head. In some cases, the Tariff Authority of Major Ports (TAMP) was actually allowing companies to charge their revenue shares as cost! So, let’s say a company’s costs were Rs 80 and if, say a 25 per cent return was to be allowed to it, it would need to earn Rs 100. So, 100 units of cargo were being despatched from the port, it would be allowed to charge Re 1 per unit. Now let’s say it promised to share half of its earning with the government – so, it has to give Rs 50. TAMP, in several cases, assumed the company’s costs were Rs 130, and so allowed it to charge Rs 1.3 per unit of cargo! The company, if it had wanted, could have offered to share 99 per cent of its revenue with government and still not have been out of pocket.

The story’s the same in all cases – the government appears to be run solely/largely by what corporate interests dictate.

Jai ho!