UDF set to extract power out of Lavalin deal

KERALA ASSEMBLY POLL 2006

What makes the United Democratic Front (UDF) go ballistic during its election campaign against the Opposition is the controversial SNC Lavalin case, which was referred to the Central Bureau of Investigation (CBI) weeks ago by Kerala Chief Minister Oommen Chandy.

The controversy has poked holes into the LDF's corruption-free image but has also shown up the Congress-led United Democratic Front (UDF) government as a bunch of bumblers for being unable to get to the bottom of the matter. It is dominating the election atmosphere.

The Rs 396 crore SNC Lavalin deal for the renovation of three hydroelectricity projects in the state with the Canadian company was finalised when CPI(M) State Secretary Pinarayi Vijayan was power minister in the previous LDF government.

It snowballed into a huge controversy after the Comptroller and Auditor-General (CAG) criticised the deal in his report. The Kerala State Electricity Board was pulled up for having chosen three hydroelectricity projects in the state for renovation and the award of a related contract to SNC Lavalin of Canada.

In its report for 2005, the CAG cited deviations from prescribed procedures in selection of the Pallivasal, Sengulam and Panniar projects for renovation.

The CAG found the terms and conditions of the foreign loan for the project detrimental to the financial interests of the state electricity board and also said the deal for the renovation did not increase the efficiency of the machines or improve generation of power.

The indirect indictment of the former power minister, who is today one of the two most important leaders of the CPI(M) has become a matter of glee for the United Democratic Front.

Says state Congress unit chief Ramesh Chennithala, "I wrote an open letter to CPI(M) General Secretary Prakash Karat telling him all about his comrade in Kerala and his role in the Lavalin deal. What more needs to be said after the CAG has pronounced its indictment against CPI(M)'s top leader?"

Later, a vigilance inquiry was ordered by the present UDF government in the deal but it shied away from naming Vijayan. It cost the vigilance director his job but caused fingers to be pointed at the United Democratic Front government too.

However, days before the elections were announced last month, the chief minister ordered a CBI probe. The Election Commission has, however, asked the Chandy government to rescind the order.

Says CPI(M) leader and MP Suresh Kurup, "The Lavalin deal was inked by the UDF government and only implemented by the LDF government. Hence the Congress cannot call itself completely free of blame".

Besides, he says, "the latest CBI probe is merely an attempt to draw political mileage out of the case on the eve of elections. Why was the inquiry not ordered earlier?".

The Lavalin deal has left CPI(M)'s former power minister with a tainted image, which does not help him either in his fight with the UDF or in his contest within the party with the man with the squeaky clean image VS Achuthananthan.

The deal has also not left the Congress government looking any cleaner as it failed in five years to nail a single person for the loss of crores of public money.