A tale of two scams

I believe Khurana has met Vajpayee. He has been assured that the matter will be sorted out soon. What can the Prime Minister do now? The items have already been put on open general licence (OGL). As regards the `Vahini’ project, the government has announced that it is not impressed by the objections. Some six years ago, India was able to persuade its main trading partners, except America, to postpone till 2003, a WTO fiat, to allow the import of the 14,000 banned items. Having accumulated enough foreign exchange reserves, New Delhi could not use the old argument that it had no hard currency to pay. Practically, all countries accommodated India.

But Washington remained ada-mant. It insisted on the opening up. New Delhi went to WTO’s lower court but lost the case. It went in appeal. The then Prime Minister, I. K. Gujral, along with the then Finance Minister, P. Chidambaram, met President Clinton, who appreciated their economic and political difficulties. New Delhi got the good news within three days. US ambassador in Geneva told the Indian ambassador that America was agreeable to the leeway for six years. The two were to settle on which items the ban would be lifted first and on which later.

By then the BJP-led government had come to power. It bungled at the negotiating table. New Delhi also lost the appeal. Still, the government had nearly three years following the assurance given by the US ambassador in Geneva. But the present government has lifted the ban long before the time limit.

No explanation is available. But it is an open secret that the government’s announcement came in the wake of a letter it received from the US Commerce Secretary. The annexure to the letter, which listed the commodities for immediate import, included all types of meat, including beef and pork, dairy products and foodstuff. It is said that Vajpayee was not briefed on what the lifting of the ban would entail. He should know that manufacturers, traders or growers have been exposed to competition from abroad all of a sudden when they had a span of two or three years to prepare themselves.

America’s hand is more visible behind the Rs. 1,300-crore project of Sankhya Vahini India Limited (SVIL). This is a joint venture company between the Government of India (51 per cent) and IU-Net (49 per cent), a fully owned subsidiary of Carnegie Mellon University (CMU), Pittsburgh. The first chairman has been nominated through the IU-Net. And there is a proposal to waive the customs duty of Rs. 275 crore on the equipment.

When the negotiations began, the Indian mission in America reportedly sent a fax message that it could not trace the company by the name of IU-Net. Still, New Delhi went ahead without ascertaining its bona fides and its legal relationship with CMU and without taking the competitive bidding route. No tenders or quotations were sought from similar technology suppliers. The main agency of the government DOT/DTS was not involved in the process of deciding the project. The parliamentary standing committee on communications was also ignored. Why? The committee, which includes BJP members, has said in a unanimous report that the IU-Net was selected "without undertaking any study about the technology available with the company and its competitors." The committee has asked the government to explain how it agreed to a situation where "without actually investing in cash the IU-Net becomes the major shareholder owning 49 per cent shares."

Somnath Chatterjee, the committee’s chairman, has expressed fears regarding the country’s security. He has said: "The project would open the floodgates for espionage, interception of scientific data, telephonic conversations, faxes and e-mail." Incidentally, V.S. Arunachalam, once India’s defence adviser, is one of the directors of IU-Net.

In a letter to P.S. Saran, secretary of the Department of Telecom Services, P.V. Jayakrishnan, secretary to the Ministry of Information Technology, has pointed out that the assurance to the Telecom Commission on submission of technical/business plans "as and when ready" has not been done. Jayakrishnan has alleged that the "Note for the Cabinet" did not give full information. It was wrong to say that "the concept has been seen and approved by the Telecom Commission", he says in the letter. This is a serious lapse.

The Sankhya Vahini is not an ordinary project. It will have a massive band width. The data flow will be at 2.5 to 40 gigabits per second (gbps). This is roughly a thousand times more than the existing network. It means that the `Vahini’ will control practically all activities and players in the information and communication field. In other words, it will exercise a techno-monopoly over even future data and voice transfers. Similar networks the US and China have them are strictly under the government and exclusively under defence control. How can India afford to give control of channels of communication and information to a foreign venture partner? Even the Central Cabinet was not informed that IU-Net was a 100 per cent subsidiary of GU-Net. The government has not yet disclosed the names of the promoters of GU-Net. And what is its relationship with the CMU?

There is no doubt that the lifting of ban on the commodities and the shady Sankhya Vahini are a fallout from the government’s pro-active policy to placate Washington. Probably, it is because of the influence of the pro-American lobby which surrounds Vajpayee.

Remotely, the name of Andhra Pradesh Chief Minister N. Chandrababu Naidu has been mentioned in this context. His clout is obvious, as his 28 Lok Sabha members do give Vajpayee a clear majority in the Lower House and it was Naidu who saved the NDA government when the AIADMK pulled out of it.

The `Vahini’ is a scam which must be looked into by a parliamentary committee of both houses. All relevant papers, notes and letters must be placed before the public. If the transparency of decision has any meaning, this is the least the Vajpayee government can do. Let the people judge.