Delhi Government Broke Rules for Privatization
Sujay Mehdudia
The Hindu
September 22, 2005

NEW DELHI: In a severe indictment of the Delhi Government led by Chief Minister Sheila Dikshit over the whole process of privatisation of the power distribution network in the Capital, the Public Accounts Committee of the Delhi Legislative Assembly has accused the powers that be of bending all rules and colluding with business houses to "accrue monetary benefits'' to them.

It has alleged possible involvement of one or more members of the Core Committee set up by the Delhi Government for power privatisation in favouring the conditional bidders for "monetary consideration'' by effecting major modifications in the transfer scheme.

The report carries a highly damaging indictment of the Delhi Government, its Power Department, and senior bureaucrats who handled the whole process of privatisation three years ago. Sheila Dikshit loyalists did not allow the report to be adopted at the PAC meeting on Tuesday.

The PAC, headed by ruling Congress Party MLA S. C. Vats, has recommended that the Government now approach the Central Bureau of Investigation (CBI) for an enquiry to ascertain the circumstances that led the members of the Core Committee to go against the interest of the public exchequer in favouring the conditional bidders. .

"The PAC is of the opinion that members of the Core Committee bent all rules and, in blatant violation of the Request for Proposal (RFP) clauses 19.5 and 19.8, colluded with the business houses who were bidding for the power distribution business, and at their behest made drastic changes in the transfer scheme so as to accrue monetary benefits to the conditional bidders in the long run. The members of the Core Committee also attempted to undermine the authority of the competent authority (Lieutenant-Governor of Delhi) by seeking a doctored legal opinion from the Law Department of the Delhi Government so as to alter the definition of `Government','' the report says.

The report notes that the same Core Committee prior to fixing this deal had opined to the Cabinet that bids being conditional in nature "may not be accepted in their present form". And by saying that bids may not be accepted in their present form, the members of the Committee wanted to retain the handle with themselves and leave enough scope for them to "manipulate'' things, it adds. In its most damaging portion, the PAC states: "In this background, it is felt that all was not above board and it does not rule out the involvement of one or more members of the Core Committee in favouring the conditional bidders for monetary considerations by accepting conditional bids and effecting major modifications in the transfer scheme, policy directions and contract agreements without the approval of the competent authority.''

According to the PAC report, the Core Committee agreed to all major concessions sought by the bidders and instead of addressing the concerns of the Government and the Capital's power consumers, it seemed more concerned about the bidders' interests. "`The PAC is of the firm view that had the revised conditions and liberal concessions been made public at the time of issue of bids, more bidders would have entered the fray and enabled the Government to strike a better deal in favour of the consumers.''

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