Tuesday, March 01, 2011

How crony capitalism lead to the Kakarapalli tragedy

The killing of 2 villagers and the large scale violence unleashed by police in Kakarapalli village in Srikakulam again brings into question the crony capitalism presently destroying the moral, social and economic fabric of our society. With active connivance of politicians and bureaucrats, the capitalists have unleashed an era of loot and plunder. This post focuses on the East Coast Energy Pvt. Ltd project in Kakarapalli and the circumstantial evidence available in public domain to show that the project promoters and the bureaucrats in environment ministry went hand in glove to violate all environmental norms and most importantly, the rights of people to work and live in the proposed project area.

Process of obtaining EC from MoEF:
How does a project like this get necessary permissions? The Ministry of Environment and Forests grants prior environmental clearances to projects or activities on recommendations of the Expert Appraisal Committees (EAC). Several categories exist under the Ministry for projects related to Mining, Nuclear energy, Coal and Thermal energy, Hydroelectric etc. Each category has an EAC to assess projects in its category. The EAC shall scope and appraise these projects or activities and issue the environmental clearance (EC). So the EAC is the apex body here with almost a dozen members and a chairman and this decides the clearances. It is interesting then to see that EACs generally are headed by former bureaucrats and those who have nothing to do with environmental issues.  And worse they recommend projects which they themselves are promoting!

About East Coast Energy Pvt Ltd (ECEPL)
The 2640 MW Bhavanapadu coal-based thermal power plant near Kakarapalli is being developed by East Coast Energy Private Limited (ECEPL). If you look out for the promoters of this company in their website, you would find that Athena Energy Ventures Pvt Ltd (AEVPL), AIP Power Pvt Ltd (AIP) and PTC India Financial Services Ltd are among them. All these 3 promote another company Athena Demwe Power Limited for a hydro-electric project in Arunchal Pradesh. If you look at the board of directors of this company, you find a certain Mr. A. Balraj. Mr Balraj is a retired IAS officer and more interestingly, the chairman of the Expert Appraisal Committee (EAC), the same which recommended the environmental clearance for the Kakarapalli!

The following details of this Environmental clearance are available on the website of Ministry of Environment & Forests.
Project No: No:J- 13011/36/ 2008-IA II(T) 
Project Name: 2640 MW Bhavanapadu TPP near Kakrapalli Village
District:Sri Kakulam
Company:M/s East Coast Energy Pvt. Ltd.
Application for EC received: 18/03/2008
EC Approved: 09/04/2009

The aftermath of obtaining EC
It is during A.Balraj’s tenure that the EC has been approved. Amazing thread of intrigue indeed. Such a glaring conflict of interest in public domain. So it is easy to guess the kind of appraisal done to grant the environmental clearance (EC) for this project. Well, it was a matter of time before the truth.  In August, 2010 after series of complaints by environmental & social activists, a committee set up by the Union Ministry of Environment and Forests has confirmed the existence of wetland around the thermal plant site near Kakarapalli village. The committee also said that the plant would irreversibly damage surrounding wetland and ecology. Read the full report here. Earlier, the EC was obtained maintaining that the site is not in a wetland nor is in a conservatory zone. This is apart from destroying livelihood and living conditions of the native village folks living there. But then despite the proof that clearance has been obtained on false claims, the EC was not cancelled. The manipulations continue and with active connivance from bureaucrats, state government and police, the crony capitalists now ended up killing 2 people.

Crony capitalism and its serpentine connections
Incidentally, the Sompeta project in the same Srikakulam district which claimed lives of 2 people in a similar police firing last year has this same dubious connection. That thermal project is being developed by Nagarjuna Constructions and it has on its board of directors the esteemed presence of P.Abraham who served as Chairman of EAC(Hydroelectric) and who in the same position approved environmental clearances for various projects which he was himself promoting as a director. He also sits on the board of companies promoted by those who promote Kakarapalli project. Some of the promoters are marquee names in Telugu press by now, namely Karvy’s Mr MS Ramakrishna and Matrix Prasad.  Mr P. Abraham also graces the director position in GVK, Lanco group and half a dozen other groups. The world is indeed a small place now. You run into the same names every day. Long live crony capitalism.

Tehelka published an insightful article on how the DMK’s 12 year stint at the Environment ministry changed things in environment clearances. Tehelka said “In the 20 years from 1986 to 2006, the MoEF cleared 4,016 projects. According to the 2009 report by the environmental group Kalpavriksh, entitled ‘Calling the Bluff: Revealing the state of Monitoring and Compliance of Environmental Clearance Conditions’, the MoEF cleared 80 to 100 projects every month with a range of environment and social impacts. Under the new EIA 2006 Notification, 2,016 projects were cleared between 2006 and 2008 in just two years. “ So while the union ministers themselves were ‘milking’ the ministry, the babus pulled up their socks too. In a glaring conflict of interest many chairmen of these EACs are on the board of the same projects they are approving in their official capacity.

Dubious credentials of present Chairman of EAC (Thermal)
Despite the tragedies of Sompeta and Kakarapalli, and this latest notification suspending the project activities in Kakarapalli till March 07, 2011, there is an uneasy feeling among the environmental activists as the present chairman of EAC (Thermal), V.P.Raja too is a retired bureaucrat heavily involved with ‘corporate affairs’. There has been a formal request made to Jairam Ramesh to remove him as his appointment was a violation. After the tragedy, an uneasy truce lingers on for now. 

Image courtesy: downtoearth.org.in


reddy12 said...

Keep up the good work Amar! You need to get into journalism!!

Madhav said...

Good work Amar! I was completely oblivious of this issue. That was informative.

Anonymous said...

Thanks for this informative piece! You've really laid it all out very logically & succintly!

S.Jeevan Kumar said...

I cuold gather some more information from your writ up.It would help me to pass it on to the people in my speeches and writings.
Thank you.
S.Jeevan Kumar

aditya said...

Good Research , I saw their website and looked for some Clues but , i couldnt find anything fishy, You found it Great.Keep up the good work.

TG said...

The Gujarath Model- Rapid Economic growth with GDP growing at double digits seems to be the only Aim of Manmohan singh and his govt, But few Realise that Gujarath model is a failure , HDI levels in Gujarath are Pathetic compared to the rest of the country, for example the Malnutrition rate in GUJ is higher than that of UP, the and comparable to the other BIMARU states, GUJ has more cities with Highest GDP in the top 10 list than Rest of the whole country combined. Gujarath model will be Disastrous it will only explode inequitable Development.

Why doesnt the country Emulate Kerala Model instead

Anonymous said...

Do not criticise for criticism sake. Know the ground realities. This is not about the environment but about the new playground for political wars. a High Court cannot be ridiculed for the sake of eyeballs on the blog. The local agitation has nothing to do with environment as understood by sustainability but environment as understood of greed need for money.

Amar said...

@Reddy12, @Madhav,

Thank you.

@S.Jeevan Kumar,

I am glad this post has been of some use to you. I hope your writings expose this blatant conflict of interests in your writings.


All EACs of MoFE irrespective of categories, from thermal to hydroelectric, are riddled with double agents. You can focus on that and get more info online.


More than the model of development, the real question is the procedures involved and how they are subverted by people with power and pelf. For now, we can focus on that - the existing system and how it is rigged.