Members of FKJGP on a hunger strike on the premises of the State Central Library, Shillong, in protest against the power deal. A Telegraph picture

Of stinking power deals

In Meghalaya it is common to see one government sign a bad deal and a successor government rescinding it. Many an election has been fought and won on the promise that a contract signed by the government of the day with private parties amid public opposition because of the opacity surrounding the deal would be scrapped if a different government came to power. Meghalaya is also perhaps the only state where a chief minister was dislodged and a new government installed in December 2001 because of allegations of corruption relating to the Meghalaya House deal.

Not willing to learn from history the previous Congress-led government headed by D.D. Lapang signed a number of contracts with independent power producers (IPPs) under the private-public-partnership (PPP) mode. Meghalaya cannot boast of a single project which has been contracted in a climate of transparency, taking the people of the state into confidence. Our elected representatives are just not worthy of our trust although they are termed as “honourable members” of the Legislative Assembly or Parliament.

Power crunch

Meghalaya is in the midst of a severe power crunch. During the winter months when the water level in the 40-year-old Umiam lake dips to dangerous levels, the Meghalaya State Electricity Board (MeSEB) resorts to a three-hour-long loadshedding everyday. This despite the state buying power from the national grid and expending crores of rupees every month because the consumer is paying subsidised power tariffs. Meghalaya has an electricity regulatory commission, which is an offshoot of the power sector reforms. This commission is meant to facilitate the transition of MeSEB into a corporate entity. But this transition, mooted five years ago, still remains unfulfilled. The state continues to pay out huge amounts every year for subsidisation of power.

It is only fair that Meghalaya explores the possibilities of generating hydro-electricity from its abundant swift-flowing rivers and thermal power from coal, which is also abundantly available in the state. Towards the latter part of 2007, then power minister Mukul Sangma signed seven contracts with sundry firms claiming to be independent power producers. Among the bidders was a company that produces pan masala. How that company suddenly diversified into a power producer is mysterious. In fact, of the seven companies, only one appears to have some kind of experience in thermal power production. The rest have no record of having produced even one kilowatt of power anywhere in the country. The manner in which these contracts were signed, were, to say the least, non-transparent and they reek of a shadiness that is characteristic of all projects related to Meghalaya.

Interestingly, when the power department on September 2007 called for expressions of interest, it was only for projects below 100MW. This was because according to the Electricity Act 2003, all projects above 100MW had to come through the international competitive bidding (ICB) route. The state government, again very interestingly, formulated a power policy which drew much of its inspiration from the National Power Policy in October 2007. Then, in a quick turn of events, power minister Mukul Sangma set up an empowered committee with himself as the chairman and some bureaucrats as members. There was not a single technical person on the committee. This committee hurriedly amended the state power policy on December 10, 2007, mainly to enable some of the handpicked companies to start their power projects in Meghalaya. The very next day (December 11, 2007), the memoranda of agreement (MOA) were signed with the seven companies.

Price paid

A hue and cry ensued. Civil society organisations threatened to take to the streets if the deals were consummated. Around that time, Meghalaya was readying itself for the Assembly polls scheduled for March 2008. Things became too hot for the Congress party to handle. The government adopted a face-saving device. It appointed a committee comprising top bureaucrats to study the MOAs and give their report. The party was simply buying time. With so much money in their hands, they were confident of coming back to power after the elections. Once ensconced in the seat of power, the Congress was going to push through the deals despite public opposition.

Unfortunately for the Congress party, it could not form the government in Meghalaya despite being the single largest party with 25 MLAs. A coalition government comprising the NCP, the United Democratic Party (UDP), the Khun Hynniewtrep National Awakening Movement (KHNAM), the BJP, the Hills State People’s Democratic Party (HSPDP) and Independents formed the Meghalaya Progressive Alliance (MPA) government. Despite being an alliance of disparate forces, this political marriage appears to have worked mainly because the allies are aware that the only other option, and not the best one at that, is to align with the Congress. The UDP and the KHNAM had been allies of the Congress in the last government. The UDP, the NCP and the KHNAM had all fought the 2008 elections on an anti-Congress plank. So, aligning with the enemy so soon after the elections would have been political suicide.

Legal issues

What is now hanging like the sword of Damocles over the MPA government are those seven power deals which have already been signed and sealed. The report given by the committee of bureaucrats is now ready to be placed before the cabinet. But even before the report was submitted, there were clamours from leading NGOs of the state demanding that those “dubious” deals be scrapped. Joining the chorus are the NCP and the UDP who on July 11, wrote to chief minister Donkupar Roy asking that the deals be annulled.

Expert legal opinions were sought on whether the deals should be cancelled. Power minister Conrad Sangma has taken a stoic stand that he is not the sole decision-maker on whether or not to scrap the deals. He says the decision lies with the MPA. The young power minister, however, cautions that scrapping the deals will land the state in legal tangles and result in unnecessary delays in commissioning new projects. At a time when the state is facing a critical power situation, he wondered if the decision to scrap all projects was wise.

But the people of Meghalaya seem to be adamant that the deals should be axed. One pertinent question they have raised is about the personal liability of Mukul Sangma. Should he not pay the penalty that the state might have to incur for scrapping the deals? Henceforth the people of Meghalaya should demand that a penalty clause against the signatory should be inserted in every memorandum of agreement signed between the state and private parties in case the agreement is flawed and causes loss to the state.

(The writer can be contacted at patricia17@rediffmail.com)