Tuesday, September 11, 2012

Ex-coal minister Santosh Bagrodia’s issue hardly a scam….

The TOI has surprisingly front paged a story alleging a scam in the way in which NTPC allotted a Mine Developer and Operator (MDO) contract to an Australian company Thiess Minecs (TM) in which Bagrodia’s “family” owned 10% equity (“Ex-coal minister Bagrodia’s brother got fat mining deal”). Surprising because the TOI is usually careful about sensationalism. Maybe the fact that the contract was worth Rs 23000 crores must have proved too tempting to ignore! But assess the facts and decide for yourself what the truth is:

  • The MDO contract was awarded on the basis of an international tender. Apparently, the entire bidding process took 56 months. Talk of speed!
  • From amongst the several bidders, the one chosen was TM since they were the L1 (lowest) bidder “by a huge margin” as the CEO of TM has stated.
  • Ex-minister Bagrodia’s brother and his son (the brother’s) are Directors of TM – begs the question if a brother can be called “family” in the business context. Brothers often fall out. Brothers often run different and separate businesses. In this case, the ex minister has stated exactly that. That he has not been associated with his brother’s businesses since 1986. There is nothing to say that this is a lie.
  • The Australian company owns 90% of the joint venture TM. They have already clarified that Mr. Bagrodia’s place in the Coal Ministry had nothing to do with the MDO contract won by it.
  • The Australian company has also clarified that the 10% owned by the ex-minister’s brother was not “sweat” equity and he had paid cash for his share.
  • The ex-minister’s brother’s company “has been a dealer for Komatsu Mining, a Japanese construction and mining equipment maker that was working with Thiess in other parts of the world. It was because of Komatsu’s reference that Thiess got into a JV with Bagrodia” as mentioned in the TOI. So the ex minister’s brother was obviously qualified to partner with Thiess in this JV.
  • Not only was TM the lowest bidder, it was also technological competent to undertake the mining operation.

All of this begs the question if we are trying to sensationalize matters just for the sake of doing so. Where is the conspiracy angle here? Auctions were conducted. The bids were allotted to the lowest bidder. There can be no questions raised about the capabilities of the winner. So why this a front page story?

Also begs us to ask the question if a politician’s “family” – which in my mind should not include anyone outside of his immediate family (sons, daughters, spouse mainly) – should exit all businesses because someone may allege that the politician brother helped the businessman brother/sister. In today’s surcharged political environment, there is of course no need for any evidence to be presented. Newspapers would be happy to carry the story on the front pages. TV channels can be expected to put up panel discussions which would build a rant against the “family”. But someone needs to ask this question if a brother’s business can be linked in this way to a politician’s work. So many of our politicians come from business families. So what are we saying here? That businessmen should not become politicians? Or that their families of politicians should give up all businesses. Obviously, there are enough examples of politicians helping their families….but should that be “stereotyped” or should that be taken on a case to case basis?

A similar thing happened with Naveen Jindal’s power plant. TOI alleged that he had been blessed with free coal blocks and he was raking in the moolah by selling power at market rates. The BJP jumped at this story and alleged that the Congress had corruptly rewarded Jindal. But it was left to Jindal to point out that the mine in question was allotted to his company by the NDA and at a time when he was not even in politics. The grilling by the anchor of Scam TV was on the line that any businessman making big profits is corrupt. He even suggested that Jindal should sell power cheap. The poor Jindal was left to explain that relax….the profits were coming down! Thank god the profits were coming down! That’s what has come to pass now in India. If the corporate sector profit comes down, that’s good! The Mint todays does a fair story explaining how Coal India didn’t want this mine since it was uneconomical, how Jindal invested and developed it, and how Jindal could well have lost money (and could similarly lose money on other mines and other projects) that would have hurt his company’s profit. He took the risks and reaped the reward. But no, the anchor of Scam TV couldn’t care about such fine points. He had already scored his TRPs!

But seriously, we need to ask this question if anything we read or watch is accurate at all. No one in media does adequate research. Most are reporting hearsay and the “scoops” they claim to be conducting are nothing but someone in the government “auctioning” the inside stories to the “highest bidder” in the media. Considering that most people get all their info from newspapers and TV channels, we need to worry if our people are being consciously misinformed.

TOI did give the details but on an inside page which most people would miss reading. Shouldn’t the entire story have been front paged along with the ex minister’s clarifications….or carried entirely on the inside page? Such splitting of stories on two pages doesn’t help anyone.

The real truth is that anything passes as a scam these days. Even authentically conducted auctions which reward the lowest bidder are considered to be a scam. Simply because a politician’s brother is in business doesn’t mean the politician abused his power. Its time media became more responsible…..

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