War clouds

Those who ask the government to take strong measures to stop cross-border terrorism fail to appreciate the fact that we are facing an enemy who is not weak ("War Clouds", June 7).

Pursuing terrorists across the Line of Control or attacking their camps across the border can be counterproductive. India spoke about maintaining the sanctity of the LoC during the Kargil war. If it violates the LoC now, Pakistan can also do so, choosing its own time and place. Then, how can we be sure that action across the LoC will bring an end to cross-border terrorism?

Even a limited war would cost both countries thousands of lives and crores of rupees. There would be severe setbacks to developmental activities. With missiles being deployed, major cities and towns in both countries could be targeted. Pakistan has already threatened to exercise the nuclear option. This opens up the possibility of a nuclear war.

The best option before the two countries is meaningful dialogue. The very process of initiation of talks can bring down tensions.

D.B.N. Murthy Bangalore* * *

The Indian government, dominated by Hindu nationalists, continues to prioritise sectarian and non-secular agendas. India pledges that it will go to war with Pakistan unless Islamic separatists stop their attacks on Kashmir. India continues to insist that the Kashmir problem, which has claimed thousands of lives, is entirely the responsibility of Pakistan and Muslim separatist groups. India's persistent refusal to address the Kashmir issue might well leave the fate of Kashmiris in the hands of Islamic fundamentalists. India is yet to take responsibility for its systematic violation of the rights and lives of Kashmiris, while Pakistan continues to use terrorism as state policy.

In addition, in the recent carnage of minority Muslims in Gujarat, militant Hindu dominance was on display. The saffronised government and the police perpetrated violence against Muslims in the State.

Police mistreatment of people belonging to 'lower' castes, classes and minority religious groups, women, tribal people, intellectuals, activists, political groups and others is evidence of the unstable and insecure conditions in which non-dominant communities in India continue to live.

All that is sacred in the Constitution, all that our ancestors struggled for, all that remains of the memory of Gandhiji, are desecrated.

In this situation, the majority of the Hindu Indian business community in the U.S. maintains complicit silence, refusing to accept the vicious consequences of Hindu nationalism. They continue to fund fundamentalist Hindu organisations that are registered as charities in the U.S., ostensibly working to promote and protect Indian heritage and culture. Such organisations utilise funds raised in the name of 'culture' to foment social division and intolerance and encourage the brutalisation of the minorities in India.

The Coalition Against Communal ism and other progressive organisations in the U.S. struggle to build a political culture that can confront Hindu xenophobia. Hinduism, unlike Islam, has a benevolent image in the West as a religion of peace. It is often held and peddled as an abstract textual entity devoid of the radical inequities that make up its cultural and historical reality.

Hard-line Hindu organisations maintain that Hindu culture and Hindus in India are being marginalised, that there is an Islamist plan for the genocide of Hindus, and that Hindu fundamentalism is a fiction conjured by the secular Left.

As an Indian I struggle against the failures of India's democracy and I am horrified at what we have become as a nation and as a people. India must commit itself to creating a secular and democratic society that addresses its injustices and entrenched oppressions. Violence in the name of religion has to stop and minority groups must be accorded full and executable rights. We must defy Hindu nationalism and its systematic use of violence against the minorities. We must examine the present political climate in which relations between India and Pakistan continue to deteriorate and both states commit crimes in the name of freedom. We must take responsibility for the unjust histories through which our nations were conceived. It will require extraordinary courage and commitment to do this.

Angana Chatterji Professor, Department of Social and Cultural Anthropology, California Institute of Integral Studies San Francisco

* * *R. R. Sami Thiruvannamalai, Tamil Nadu* * *Syed Abdul Khadir Harrow, England* * *Chandan Adhikari Boston, U.S.* * *Swaroop Kommera New York, U.S.Sri Lanka

The reason attributed by Eelam People's Democratic Party leader K.N. Douglas Devananda for Liberation Tigers of Tamil Eelam chief V. Prabakaran's demand for a separate Eelam cannot be accepted ("Usurping a mandate", June 7). Prabakaran did not give up his freedom struggle in any situation. But Douglas, who called himself a freedom fighter when he was in the armed wing of the Eelam People's Revolutionary Liberation Front (EPRLF), is a full-time politician now. This transformation may be his first step to fulfil his desire to lead a sophisticated life by being a part of the Sri Lankan government.

K.B. Rajaguru Madurai* * *Professor M. Sornarajah Received on e-mailFrontline

I am a regular reader of Frontline. I find the magazine very informative and interesting. It provides in-depth coverage of entire national and international affairs. It is truly national, covering current affairs from every part of the country. I have one suggestion. There are many Indians who do not know English, so they cannot read this magazine. Why don't you start publishing Hindi edition of Frontline so that those people can benefit. I am suggesting this for the benefit of society.

Manoj Kumar Hyderabad* * *Power reforms

There are a number of factual inaccuracies in the statements and figures quoted by Sudha Mahalingam in her article "A reform fiasco in Orissa" (May 24). The article seems to be based mainly on the executive summary of the Soven Kanungo Committee Report, and the conclusions drawn are not corroborated by facts. She has made no effort to get a feedback from various stakeholders on the above report or to investigate the underlying issues in the power sector reform that is currently under way. Any assessment of a process or a model should not be one-sided. An official report can hardly be considered the last word on reform without taking into account the opinions of stakeholders involved in the process.

The following note points out the factual errors in the article. No comments are offered on the author's points of view or value judgments:

"It must be pointed out that the Orissa reforms failed not because the Bank's milestones were not adhered to or because the State government reneged on its commitments to the Bank."

The State government did renege on several of its commitments - to the World Bank, to Gridco and to the Utilities. In July 2001, the Bank suspended the loan to Orissa because even after repeated reminders from the Bank and several discussions between the Bank and the State government, the latter withheld loans from Gridco and the distribution companies. Even after the suspension of the loan was lifted from January 2002, further defaults were made by the State government in passing on Bank loans to the beneficiary utilities.

As on March 31, 2002, the State government and State undertakings owed the distribution companies Rs.230 crores towards the electricity consumed by them. These arrears have been mounting steadily over the last few years, with budgetary provisions being hardly sufficient to meet even a part of the current charges. Repeated assurances of the State government to liquidate the arrears and pay the current charges have not been honoured.

The State government owes the four distribution companies Rs.23.23 crores towards rural electrification subsidy for the year 1999-2000. Though the subsidy was recommended by the OERC in October 2000, no payment has been made.

Repeated assurances that the State government will convert into equity the Rs.400-crore worth Zero Coupon bonds issued by Gridco to the State Government were never honoured.

"Average retail power tariff in the State have increased by 267 per cent since 1991-02 (40 per cent since the reforms began)."

According to a note presented by the OERC to the Kanungo Committee, the tariff rose by 268 per cent during the period 1990-1991 to 1997-98. During the same period the cost of supply rose by 374 per cent. While the OERC's note mentions both the rise in the tariff and the rise in the cost, the Kanungo Committee and the article in Frontline mention only the rise in the tariff.

"Generation capacity stagnates at 2,900 MW and there appears to be a flight of industries from the State."

We have no record of any flight of industries from Orissa. What has happened is that several industries, many of them mineral-based, which were expected to come up in the State did not. This is an all-India phenomenon resulting from the industrial recession and is not Orissa-specific. Far from scaring away industries, a special tariff for the five export-oriented ferro-chrome/charge chrome units in the State has saved them from closure.

"Gridco, the state-owned transmission company which owed Rs.1,667 crores to the National Thermal Power Corporation (NTPC) as on April 1, 1996, for power purchased from the latter during its earlier avtar as the OSEB, now has a staggering Rs.7,310 crores (inclusive of interest) as outstandings to the NTPC and the National Hydroelectric Power Corporation (NHPC), as on September 30, 2001. The interest liability alone was Rs. 4,262 crores as on that date."

The figures of Rs.7,310 crores and Rs.4,262 crores quoted as dues owed by Gridco to the NTPC and the NHPC are totally erroneous. As on March 31, 1996, (on the eve of the formation of Gridco), the OSEB owed the NTPC Rs.157.72 crores. As on March 31, 2002, the amount went up to about Rs.1,000 crores, including about Rs.226 crores as delayed payment surcharge. The figure of Rs.1,000 crores is after the issue of bonds worth Rs.313 crores by Gridco to the NTPC and bonds worth Rs.400 crores by the three BSES companies to Gridco, which were reassigned by Gridco to the NTPC. The amount owed to the NHPC is about Rs.16 crores and that to the PGCIL is Rs.9 crores. (These are the figures of the Generators; Gridco figures are lower.)

"The figures of transmission and distribution losses, officially reported to be 39.5 per cent of the power supplied at the beginning of the reform period, have since been revised upwards and were acknowledged to be around 44 per cent in 2001."

The figure of 39.5 per cent shown in the World Bank's Staff Appraisal Report was a mistake based on incorrect and incomplete data. This has been acknowledged by the World Bank several times, The audited figure of losses for the year 1995-96 is 46.94 per cent. The April 2002 BST order of the OERC has pegged the overall level of distribution losses in the base year 2001-2002 at 42.2 per cent.

"While a part of the consultancy fee may have come from grants from Britain's Department for International Development (DFID), a substantial chunk is likely to find its way into tariffs charged to consumers."

The DFID assistance to the Orissa power sector reforms was entirely in the form of grant. The Sovan Kanungo Committee, in para 3.9 of its report, states clearly that "the expenditure incurred on consultation services on formulation and implementation of reforms reported so far is Rs.306 crores (Annexure 7) which was largely met out of DFID grants". Hence there is no question of any part of the consultancy expenditure being passed on to the consumers. We have no information on the exact amounts paid to the various consultants.

"Of the $650 million that is slated to come from a variety of other sources, not a cent seems to have materialised."

The Staff Appraisal Report of the World Bank had estimated the total financial requirement of Gridco at $997 million, out of which $350 million was to be a loan from the World Bank and $97 million was to come from the DFID as grant. The DFID grant has come in toto. $246 million was expected from other sources. Against this, the three BSES companies put together have issued bonds totalling Rs.400 crores to the NTPC as explained above.

"Yet the company (AES) had claimed excessive expenses on travel, communications and so on. In its tariff proposals it had claimed expenses of Rs.1.12 crores towards telephone and communication charges, Rs.11.2 crores towards consultancy and level fees, Rs.7.24 crores towards travelling and conveyance, and Rs.2.41 crores towards watch & ward and miscellaneous expenditures - in just two years, 1999 to 2001."

The Kanungo Committee report, in para 3 of Annex 9 (dealing with the exit of AES), makes it clear that while the amounts mentioned in Frontline were as per the tariff filings (projections) of the company, the actual expenses reported by Cesco in October 2001 were less, with the expenses on legal, consultancy and professional charges being Rs.2.79 crores in place of the projected Rs.11.2 crores.

Purabi Das, Public Affairs Officer, Orissa Electricity Regulatory Commission Bhubaneswar

Sudha Mahalingam writes:

My article makes it abundantly clear that it is based on the Kanungo Committee report, of which I have a copy. The Kanungo Committee was an official fact-finding panel appointed by the Government of Orissa and as such had access to official documents. Besides, it heard in person the views of 46 stakeholders from across the spectrum, including legislators, representatives of the World Bank, reform consultants, executives of the distribution companies, officials of the State government, consumer representatives and others. It received written submissions from 78 other stakeholders. Therefore, there is no reason to question the authenticity of the findings of the committee; nor is there any need to corroborate independently the facts presented in the report. I am surprised that the OERC should feel burdened to defend the misconceived reform process in the State and even more surprised by its contention that the Kanungo report should not be considered the "last word" on the reform process.

If the OERC still has reason to dispute the findings of the Kanungo report, its version would be welcome provided it is supported by authentic data and documents, not mere assertions.