‘Enough evidence of undue favours’

PRASHANT BHUSHAN, lawyer, activist and leader of the Aam Admi Party (AAP), has been in the forefront of the campaign against the exploitation of natural resources by private corporations and is credited with various public interest litigation (PIL) petitions linked to the issue. In an interview to Frontline , he spoke about the gas pricing issue involving Reliance Industries Limited (RIL), crony capitalism and the complicity of major political parties in it and on the way forward for an equitable and fair use of natural resources. Excerpts:

The AAP government in Delhi viewed the issue of gas pricing not only as a loss to the state exchequer but also as one concerning the common man as it caused inflation. Was this a conscious political strategy?

Yes, it was. Of course, the first information report [FIR] the government filed was in response to a complaint to the government by four eminent citizens. Two PILs dealing with similar issues have already been filed in the Supreme Court. People had to approach the court because despite a lot of evidence against Reliance Industries no action was taken against the company. There was enough evidence of every kind of undue favour shown to Reliance by successive Ministers. Those Ministers who resisted were divested of their portfolios. But no agency was willing to do an investigation. Therefore, an FIR had to be registered. The AAP has decided to take up the issue of crony capitalism and corruption.

Petroleum Minister M. Veerappa Moily has maintained that RIL’s contract cannot be cancelled because an arbitration is pending. What is the correct legal position in your view?

If the government has any political will then it is certainly possible for it to cancel the contract for several reasons. Also, why should the prices be increased before the cancellation of contract? In fact, the prices should be decreased. The arm’s length contracted price of Reliance for NTPC was $2.34 per mBtu [million British thermal unit]. The cost, as per their own records, was less than $1 in 2004. Secondly, why should this gold-plating [inflating of capital expenditure] be allowed? Thirdly, why should they not have been penalised for underproduction? The government says that the matter has gone for arbitration. Fourthly, why should Veerappa Moily interfere with the Directorate General of Hydrocarbons’ view about the recovery of several parts of the oilfield? They should have been returned to the government. I am quite certain that the contract contains adequate provisions to allow the government to cancel the contract. Underproduction itself can be a clause for terminating the contract.

What could be the possible way forward for petrol and diesel price regulation in order to insulate the common man from the pressures of inflation?

The problem is the manner in which the government has squandered away our oilfields. Take the case of the Rajasthan basin. These are the biggest oilfields in India now, containing 30 per cent of India’s oil reserves. They have been given away to Cairn India and Vedanta for a song. Their cost of production is $3 and they are getting the international market price of about $100. This is according to their own annual reports.

Do you think greater involvement of the public sector in gas production could be a way forward?

The natural resources should be retained with the public sector. It is said that the public sector is inefficient and corrupt. But corruption is due to the government itself. If there is political will they can clean up corruption. For example, under E. Sreedharan, the Delhi Metro was running quite well. It’s not that the public sector cannot be made to run efficiently. It all depends on the political will of those who are put in charge of it.

The arguments put forth in favour of raising domestic gas prices are that the prices should be aligned with international prices and that more revenue would bring in more investment for exploration. How would you respond to these arguments?

I don’t understand this line of argument. It’s like saying that in order to dig out our own natural resources and loot them you need greater investments. These are ridiculous arguments given to facilitate the loot of public resources. There is no shortage of investment. The Oil and Natural Gas Corporation [ONGC] has plenty of money even though it has been made to suffer.

On the question of retaining natural resources in the public sector, is this a considered view of the AAP or is it your personal view?

This is my view. It is not a considered opinion of the party as yet. The party has not applied its mind to it yet. The main reason that was given for privatising these resources was that the public sector is corrupt. Also, the bogus reason of lack of resources was given. For natural resources, that is an utterly bogus reason. That is your wealth. To use an argument that investment is required to dig out your wealth and then to sell it off is absurd.

Where do you see the legal process going with respect to the FIR and where do you see the political action of the AAP going?

After the government is gone and the State has been brought under President’s Rule, chances are that every effort will be made to kill the investigation or to at least stymie it. Efforts might already be under way in that direction by changing the investigating officer and by putting pressure on the investigating officers. Here, political and corporate interests converge.

As for political action, we feel that the coming Lok Sabha election will be fought primarily on the issue of corruption and crony capitalism and we will continue to raise this issue [of gas pricing] as one of the biggest cases of corruption, which also shows the complicity of the major political parties.