The Bitter Truth About Melamchi – Show Hisila the Money!!

(Courtesy: Comdrade Boxer)

Comrade Doberman’s views on the Melamchi project are logical. They follow a sequential thought pattern and highlight a reality that Hisila Yami and her fellow Maoists will learn about, the hard way.

However, Comrade Doberman’s thoughts are also somewhat naive, presumptions and incomplete. Building on the case presented by Comrade Doberman, this piece will introduce some of the not-so-obvious elements that are contributing to Hisila Yami’s position.

The subtle nuances of deal-making in Nepal

While the Maoist leadership has publicly declared its intent to not hold private property, this does not mean that they intend to remain cash strapped. Also, while the Maoist “Ministers” have vowed to root out corruption from the ranks of their respective ministries, this anti-corruption drive does not apply to raising donations in the name of the Maoist party.

The convergence of these subtle nuances (in the Maoists’ party line) sheds much needed light on Hisila’s goals and objectives. Despite her “party’s” revolutionary stance and its supposed devotion to transforming the way government does business in Nepal, in reality, what Hisila is doing to carrying on the tradition of corruption (in the name of the Maoist “party”).

In brief, Hisila Yami’s reluctance at extending the Melamchi project’s management contract (to Severn Trent), amounts to nothing more than a bid at making some “extra cash.” By throwing a wrench in on-going processes, Hisila has created opportunities to make money off her ministerial designation. Like every one of her predecessors before her, Hisila Yami is now positioned to get paid.

Public-Private Partnership (PPP)?

Yami’s explicit desire to “re-bid” the management contract is a clear indication to Severn Trent and its competitors, that this “Minister” is “open for business.” Business that is, from the lowest bidder which coincidentally, is always the most incompetent, most corrupt, and most willing to line the Minister’s pockets.

The PPP that Hisila insists is the objective of her new strategy, is actually, already in effect. There is virtually no infrastructure project (especially in developing countries), that is not a PPP venture of some variety.

In Melamchi’s case, “sovereign” participation in the project is represented by the millions of loan dollars the government has already spent; the public stake in the project is represented by the jobs that have been created and the opportunities that are yet to come (even under Severn Trent’s management contract). Had there been room for significant private investment from the beginning, the ADB would not even be in the picture.

The point being made is this: to the extent possible, the concept of a public-private-partnership is pre-built into Melamchi’s project structure, already. It is because of the sheer magnitude of the investment required, that project finance is being utilized (off-balance sheet transaction, non-recourse debt, etc.) to operationalize the project.

Aside from the corruption that every large scale project bid entails, there is no need to “re-create the wheel” where Melamchi is concerned – certainly not in the name of creating a PPP when it’s already in existence.

Naive or calculated?

It is Comrade Doberman’s argument that when Yami preaches about the need for more public involvement, she really doesn’t know what she’s talking about. It is also his thinking that the Maoist ideology does not apply to capitalistic economic theory. Both are perfectly logical points but it is equally logical that in Melamchi’s case, the Maoists aren’t as stupid as they appear to be.

To the contrary, Hisila Yami fully understands the sunk costs involved in aborting Melamchi at this stage. Regardless of whether the ADB pulls out of the deal or not, Hisila is aware that she will get paid. And that’s her bottom line.

Partly because of the culture of corruption that pervades every branch of civil service in Nepal (and partly because the Maoists are hungry for funds), it is inconceivable that Hisila Yami will not make money off her current post. Of all the opportunities she has, Melamchi has the potential for an enormous payout – why on earth would Yami forgo an opportunity (to closely follow in the footsteps of her mainstream colleagues) and engage in raising “party donations,” legally?

Looking for proof of this “theory?”

If it’s in anyone’s interest to invalidate the theory presented above, the following actions should be taken immediately:

Local Representatives: Seek out Severn Trent’s local representative in Nepal and figure out what his/her political allegiances are. Had he/she been in cahoots with the Maoists from the start, the Melamchi project would have proceeded, unhindered. It is most likely that the individuals concerned, will be knocking on Hisila’s door with more frequency over the coming days. Observe and take notes.

Competing Parties: Equally important is to seek out people who represent Severn Trent’s competitors in Nepal. Expect Hisila Yami (through her own representative) to be in close contact with the front-runner company, threatening to replace Severn Trent. This information should be available with the ADB; most likely, the information is captured in the project information document, available on the ADB’s website.

British Embassy and DFID: Severn Trent is a British company. Placed in a competitive situation there is little doubt that the company will exhaust all options before giving up on a $140 million contract. In addition to direct contact with Yami through the British Economic Affairs Officer in Kathamndu, expect pressure to be exerted through DFID also. (There’s no such thing as aid without strings). Keep close tabs on pipeline projects that DFID has and any sudden changes in the funding for these projects over the coming months.

Identify Hisila’s Agent: The key to this entire drama of course, lies in identifying the individual (or group) associated to Hisila Yami. This group (or individual) will be tasked with accepting payments in return for Yami’s endorsement of Melamchi. Concentrate on identifying these individuals (and sharp spikes in their bank accounts), and this writer’s theory is easily verified.

The fact of the matter is that Hisila Yami is extremely well positioned to make money off of the Melamchi project. With every contractor in the country vying for a piece of the Melamchi pie, Yami is doing what any other Nepali politician (in the absence of rules, regulations, law and order) would do – she’s going to get paid!!

Whether it be the Royalists, or the Nepali Congress, or the UML, or even the Maoists, there is a common minimum dialect they all speak. It’s called the “dialect of dollars.” And in a country where phenomena such as social accountability, political transparency, due process, and law & order (and every other norm that underpins functional democracy), is in short supply, it comes as no surprise that even the most purist and self-righteous, are immediately corrupted by the halls of power.


RELATED LINK:

http://nepaliperspectives.blogspot.com/2007/05/bitter-truth-about-melamchi-maoist.html