core sector communique

Now another scam by Modi with same Swan?

After fiasco in carbon credit deal, Narendra Modi is now all set to strike yet another dubious deal with same Swan for LNG terminal and regasification project in Pipavav. Swan Energy is developing a floating storage and regasification unit (FSRU) project for importing liquefied natural gas into India for re-gasification. The 2,500-crore project is being implemented at Pipavav in Gujarat with a debt-equity ratio of 3:1.

SEL is in the process of raising funds for the projects, and expects the financial closure by September 2012. The project has a capacity of 3 million metric tonne per annum (MMTPA) of LNG, which is expandable to 10 MMTPA. A recent story in Reuters said that Swan Energy wants to sell 20-30% stake in the floating storage and regasification unit to raise 400-600 crore.

According to sources in the CMO, GSPC had a few months back invited expression of interest from private players for setting up an LNG terminal in the state. In the advertisement seeking the EoI, the GSPC had not given any details like location, capacity of the project etc.

In response to the advertisement, only Swan has submitted its proposal for the project to be set up in Pipavav, which now raises the questions that why the same company is being again selected for another project again in same dubious and non transparent manner.

Shockingly, instead of blacklisting such dubious company like Swan, the government is again bestowing another project. And no needless to say, some bureaucrats close to the Chief Minister are going out of their way to help dubious Swan in the project for the reasons only God, Navin Dave and they know......!

Dubious History:

The Narendra Modi government is known for its corruption and largesse extended to its selected industrialists. With a meager investment of Rs 381 crore (Rs 3.81 billion), the hitherto unknown Swan Energy was to walk away with Rs 14,296 crore in a carbon credit scam.

Truth has finally prevailed in major carbon credit scam involving GSPC Pipavav power plant and the little know entity Swan Energy, which was given away 49% equity by the corrupt Modi government at a throw away price in a dubious manner.

Swan Energy has now withdrawn from the deal after the matter became litigation in the Gujarat High Court. In 2010, GSPC and Swan had signed a deal which led to allegations that the Gujarat government had nearly handed over the Gujarat Pipavav Power Company to Swan Energy on a platter, causing huge loss to the state exchequer.

It was Rs 14,296-crore (Rs 142.96 billion) scam and the Gujarat government had no right to 'donate' public wealth to a private player in this dubious manner. With a meager investment of Rs 381 crore (Rs 3.81 billion), the hitherto unknown Swan Energy was to walk away with Rs 14,296 crore. Starting from Gujarat Chief Minister Narendra Modi to top officials of Gujarat State Petroleum Corporation, energy department and chief minister's office were involved in the scam.

Very recently (march 30 2012) , Gujarat High Court has disposed of the PIL on the matter after the state authorities told the court that the Swan had withdrawn from the deal and therefore the matter became redundant.

It is a major victory of the people of the state, opposition party which fought the legal battle and also media in Gujarat, which consistently reported on the issue creating public awareness about the major scam the corrupt government, was determined to commit. The Narendra Modi government had tried its best to first ensure that the deal details are not out in the media but once they were out his regime and PR machinery had worked overtime to ensure that it is not reported. However the vigilant Gujarat media had consistently followed up the story.

In a victory of six crore Gujaratis, the Gujarat media and whistle blowers of Gujarat who had exposed this carbon credit scam, the beneficiary Swan Energy has finally withdrawn and has informed about the same to the Gujarat High Court.

Partially credit for victory in this deal goes the opposition party which fought the legal battle but one sincerely hopes that leaders of the opposition party would try to expose many such scandals of this scam infected Modi government and would not get gloated with victory.

Interestingly, Swan Energy with 49 per cent equity in GPPC was given rights over 70 per cent of the carbon credits as per the agreement with GSPC and also converting three other power plants for earning carbon credit to benefit Swan, owned by Navin Dave, a well known fixer and power broker in the Modi regime.

Moreover, Swan had also planned to set up an LNG terminal to import fuel in Pipavav coast.

Swan has demanded interest on Rs 125 crore that it had invested as part of the dubious deal. Now one hopes that Chief Minister Modi and his officials in the CMO, energy, GSPC and finance have would not cause loss to the exchequer by paying interest to Swan. If the money is returned with interest, it will be another scam by the dishonest dispensation.

Details of Swan Energy:

A look at the annual results of Swan Energy available in the public domain shows that it has suffered operating losses from 2005 to 2008; has no material consumption in 2008 and 2007 and has material consumption of less than an average of Rs 1 crore (Rs 10 million) in 2005, 2006 and 2007; reports no payment of salaries and wages in the years 2005, 2006 and 2007 and 2008; has a modest outgo of Rs 12 lakh (Rs 1.2 million) in 2009; and has not paid any excise duties from 2005 onwards but has huge 'other expenses'.