SNC-Lavalin case: End of a witch-hunt?

Print edition : November 29, 2013

Pinarayi Vijayan after a CBI Special Court cleared him in the SNC-Lavalin case in Thiruvananthapuram on November 5. Photo: C. RATHEESH KUMAR

Supporters of Pinarayi Vijayan celebrating. Photo: C. RATHEESH KUMAR

“A STAGE in the witch-hunt has come to an end,” a beaming Pinarayi Vijayan, State secretary of the Communist Party of India (Marxist), or CPI(M), in Kerala, told a crowded press conference in Thiruvananthapuram on November 5, immediately after a Central Bureau of Investigation (CBI) Special Court discharged him and six other petitioners from the list of accused in the 15-year-old “SNC-Lavalin case”.

The court said that the CBI had failed to prove the charges of conspiracy and cheating against the seven petitioners who had sought the discharge and that it had no hesitation in holding that the allegations against them were “groundless”. The prosecution had failed to establish any dishonest and fraudulent intention, abuse of official position, or element of cheating, which the accused were charged with, Special Judge R. Raghu said in a much-awaited judgment that has the potential to turn the course of politics in Kerala, especially because of its ramifications within the faction-ridden State CPI(M).

The long-drawn-out case, which the CPI(M) had declared it would fight “legally and politically” as it effectively kept one of its most charismatic and talented leaders within the confines of the party—and out of the electoral arena—for nearly 15 years, relates to the award of a supply contract for the renovation and modernisation of three hydroelectric projects in Idukki district to the Canadian company SNC-Lavalin.

The CBI’s charge sheet had alleged that Vijayan, the State Electricity Minister from May 1996 to October 1998, along with the other accused, had hatched a criminal conspiracy to award the supply contract to the company at an exorbitant cost. The Kerala State Electricity Board (KSEB) had entered into a memorandum of understanding (MoU) without inviting tenders, thereby violating all rules and regulations. The charge sheets claimed that the KSEB signed the supply contract with SNC-Lavalin in 1997 without the State government’s approval and on the basis of a decision arrived at by a high-level delegation, headed by Vijayan, which had visited Canada. It also said that the important consideration for awarding the Rs.374.50 crore contract to SNC-Lavalin (which was not an original equipment manufacturer), without inviting global tenders, was an offer from SNC-Lavalin to facilitate a grant of Rs.98.30 crore to establish a cancer hospital at Thalassery in Kannur, Vijayan’s home district in northern Kerala.

The allegation was that Vijayan, in collusion with some bureaucrats and KSEB officials and others, had entered into a non-binding MoU to establish the Malabar Cancer Centre, instead of signing a legally binding agreement in the form of a memorandum of agreement (MoA) for the grant arranged by SNC-Lavalin. Subsequently, the company spent only about Rs.12.5 crore for the construction of the hospital, which now caters to patients from several north Kerala districts. The absence of a binding agreement had “facilitated M/S Lavalin to back out from its commitments”. It had caused a wrongful loss of Rs.86.25 crore to the government exchequer, the charge sheet claimed.

The Special Court judge said that the prosecution had not made case that any of the accused gained undue pecuniary advantage by awarding the contract to SNC-Lavalin. It had, on the other hand, attempted to pose two “contradictory and mutually destructive” allegations: one, that the act of awarding the contract to the company was “dishonest” and “fraudulent”; and two, that the consideration for awarding the contract was the offer of a grant to establish the cancer hospital, which was, in fact, a laudable objective involving the public interest. The court said the only question that remained for consideration in the case was whether there was any “administrative failure or blunder” that took place “without understanding the ramifications of the offer of grant” from various Canadian agencies in return for the award of the supply contract to SNC-Lavalin.

As Vijayan himself has indicated, the judgment marks only the “end of a stage” in the long witch-hunt that had kept him and his party on tenterhooks for so long.

“A number of forces, ‘yellow journalists to maha netas’, ‘ex-communists to anti-communists’, ‘right wing to extreme left wing’, and ‘print and broadcast media’ had joined hands against me. During all this, I did not fall down, for five reasons. First, my firm conviction that I have done nothing wrong; two, the support from lakhs of party workers and supporters who loved and trusted me and my party and stood with me during all critical junctures; third, the realisation that for a communist the path ahead will never be one strewn with flowers; four, my organisation, one which has known me through my life’s circumstances and has trusted me and has been with me throughout; and five, the belief that whatever may be the predicaments I have to face, truth will prevail in the end,” Vijayan told the media, even as party workers celebrated, shouting slogans and distributing sweets at the AKG Centre in Thiruvananthapuram.

The relief may be temporary and the judgment has come in for criticism, especially as the accused had been discharged in a case in which the trial was yet to begin, and at the time of writing this report, there were indications that the CBI would file a review petition in the High Court against the Special Court’s ruling.

Whatever may be the turn of events, the court order is likely to become a decisive element in the State’s politics, with the Congress-led government, which survives on a thin majority, about to face a crucial Lok Sabha election, and, also in the struggles within the CPI(M), which has a State party plenum scheduled to begin in Palakkad on November 27.

Although Vijayan had firmly established his authority within the State party, now holding the post of State secretary for the third term, he had all along been constrained by the shadow of the Lavalin case on him.

With the CPI(M) deciding to impose a term limit for party functionaries, the party too, perhaps, badly needed a respite that would allow it to send a forceful and effective leader like Vijayan back into the electoral arena. Vijayan’s discharge from the list of accused in the Lavalin case is anyway a setback for his rival in the party, opposition leader V.S. Achuthanandan, who had, throughout its pendency, used it effectively against him in the factional war (Frontline, “Tightening the reins”, August 14, 2009). Achuthanandan, who became the Left Democratic Front’s (LDF’s) Chief Minister twice, to a large extent on the steam of the inner-party struggles he waged against his party secretary, had on several occasions effectively hinted at Vijayan’s likely involvement in the SNC-Lavalin deal. Even last month, he told interviewers that he considered it “a corruption case”.

Achuthanandan’s initial response to the court order was muted. “I welcome the court’s decision in favour of the discharge petition filed by the accused, including Pinarayi Vijayan,” he said. In reply to que0stions, he added: “Now that the court’s verdict has come, my earlier opinions on the case have no relevance.”

R. Krishnakumar

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