Opinion: Public interest is priority
BHEL was awarded the contract on nomination basis to overcome the severe power crisis facing TS then
By Vanam Jwala Narasimha Rao
In his 3,500-plus words letter, comprising evidence-based content, to Justice Narasimha Reddy Commission of Inquiry, former Chief Minister K Chandrashekhar Rao strongly defended his government’s decision to give the Yadadri Ultra Mega Power plant’s construction on nomination to BHEL, a government organisation, and ascertained that it was perfectly legal. In the same letter, Rao observed that ‘extraordinary situations require extraordinary decisions,’ and that meant, to overcome the then existing severe power crisis, ‘extraordinary decision’ was essential.
EMRI Example
In this context, my experience in the most successful EMRI ‘public-private partnership (PPP) model’ with which I was associated for about four years in its formative and developing stages, may be of interest. In India, soon after independence, to overcome the ‘red tape and indifference’ in government to serve the citizens better, public sector undertakings were established. Later, when the Indian economy was opening up, ‘joint ventures’ were formed, but a majority of them ended up breaking very soon as they failed to produce the expected results. In continuation of these two bad experiences, the concept of ‘PPP’ evolved and steadily gained strength.
The PPP concept enabled an otherwise public service, in state funding either totally or partly, and operated through a partnership between the government and non-governmental organisations. The PPP model for 108 Emergency Response Services (ERS) of the Emergency Management and Research Institute (EMRI) is the best example. The vision of the EMRI, founded and funded initially by former Chairman of Satyam Computers B Ramalinga Raju, was to provide leadership through the PPP framework meeting ‘global standards’ in ‘Emergency Management, Research and Training.’
Arrangements between government and NGO are governed by long-term and short-term agreements, called the Memorandum of Understanding (MoU), specifying the obligations of both parties to deliver within the broad framework of performance indicators and standards. In fact, several analyses and studies confirmed in unequivocal terms, that a ‘competitive process or tender’ of selecting the private partner for the PPP framework is less effective than an invited or negotiated partnership. Maybe this equally holds good in similar other cases too.
PPP Framework
For instance, the erstwhile AP government, when YS Rajasekhara Reddy was Chief Minister, recognised EMRI, which on its own launched 70 ambulances in 50 towns of AP to cater to the 25 million population, as the State Level Nodal Agency to provide similar services in PPP and signed an MoU on 2nd April 2005. There was no tendering. The government stipulated that 108 Service would be brought under ‘Rajiv Arogyasri’ and the ‘common logo’ to be prominently displayed on ambulances.
With its successful implementation in AP, several State governments negotiated and on mutual consent by and large straight away nominated the EMRI, as a ‘nodal agency’ under PPP to provide similar services in their States. One or two States followed the tender process whereas a mix of the two methods was followed by a few. The ERS expanded initially to more and more States. When I moved on, 11 States had signed MoUs with the EMRI and operationalised ERS and many other States were considering the same.
The SC while dismissing a PIL on EMRI-108 observed that State govts were in a better position to implement policies regarding award of ambulance and emergency services
For instance, Gujarat (Chief Minister then was Prime Minister Narendra Modi), Uttarakhand, Goa, Assam, Karnataka and Meghalaya, etc, appointed the EMRI as the nodal agency without any formal tender process. A series of negotiations and discussions between the EMRI and the State concerned led to the signing of MoUs.
Despite not being a ‘tender route’, the process was transparent. It all began with visits of either side’s representatives, and discussions between EMRI and State Government’s representatives. Formal or informal project proposals, including financial implications, were exchanged before the EMRI was finally nominated, sometimes preceded by Expression of Intention mode. Either at the time of signing the MoU or launching with the State concerned, its Chief Minister and or Health Minister, Chief Secretary and or Health Secretary etc were present.
Quality Service
The massive expansion with professionalism and excellence was part of the nomination concept. Over a period, the delivery of emergency health services to vulnerable segments improved beyond expectations. Had the tender route been adopted, perhaps, this would not have been possible, at least, so speedily. If the tender route had been adopted, outdated procedural requirements rather than meeting beneficiaries’ instantaneous or continuous needs would have taken precedence. Competing to win the deal will lead to quote less to become the lowest bidder. The government’s prime concern of quality service delivery would have been lost. Hence, either prior negotiations with the potential implementing agency or a tender where eligibility conditions are tailor-made or the experience of the implementing agency is preferred over tendering, whenever public interest is a priority. In subsequent expansion, when the tender route was followed, the quality of service badly came down as experienced by the public at large.
My experience of handling PPP subjects in a senior position was proof that the nomination process was much better than the tender route’ in the public interest. The Team of Expert Advisors from the National Health Systems Resource Centre, of the government of India, a decade-and-a-half ago, after a detailed study, was all praise for the way it was established, expanded to State after State with its tremendous popular appeal along with flexibility of PPP design. It rightly and appropriately endorsed the nomination process. The team nicknamed 108 Ambulance as ‘Angel of Mercy.’
Interestingly, against this background, a public interest litigation (PIL) was filed in the Supreme Court which involved allegations against the EMRI by an organisation known as ‘Ambulance Access Foundation India’ in 2008. It alleged that a number of States had awarded contracts to the EMRI for running ambulance and emergency response services without observing proper procedure. The petitioner also alleged that there was no open tender and sought the adoption of a transparent and fair process in awarding the contracts.
The Supreme Court while dismissing the PIL on November 18, 2010, observed that State governments were in a better position to make and implement policies regarding the award of ambulance and emergency services contract. The apex court, among others, observed that they were of the considered view that the respective State governments will be in a better position to examine various issues concerned with the specific needs of those States like disease burden, health infrastructure and road connectivity. This means the government in office has the discretion.
Drawing a Parallel
Perhaps, a parallel may be drawn here in the context of Justice Narasimha Reddy Commission of Inquiry on the alleged power sector irregularities during Chandrashekhar Rao’s tenure, finding fault in giving the contract to BHEL for the construction of the Bhadradri power plant. Rao in his letter made it clear, that, the negotiations committee of Telangana Genco was successful in reducing the expenditure by Rs 400 crore, for which BHEL agreed, and hence was given the contract on a ‘nomination basis’ in view of the ‘dire necessity of power.’
If the need in the case of the EMRI to prefer the nomination process was the speedy provision of ERS, then in the case of Rao’s government, the essentiality to give the contract to BHEL on a nomination basis was the ‘dire necessity of power.’ This is what natural justice is perhaps! Tender or no tender, the administrative brilliance of Chandrashekhar Rao led to the turnaround in the power sector making Telangana a role model.
(The author is an independent journalist)
