The Nation: Urban Affairs Ministry; Battering Ram

India Today
Sep 14,1998

URBAN AFFAIRS MINISTRY
Battering Ram

Jethmalani strips Secretary Aggarwal of authority in an attempt to defang the adversarial IAS lobby.

By Sayantan Chakravarty

In his long innings as a lawyer and politician, Urban Affairs Minister Ram Jethmalani has built himself a reputation for being a pugnacious opponent. The latest to feel the heat is Kiran Aggarwal, secretary in Jethmalani's ministry.

The impetuous Jethmalani recently stripped Aggarwal, an IAS officer from Haryana, of virtually all her powers. She lost control of the prized Housing Department. She even found herself turfed out of the Delhi Metro Railway Corporation (DMRC), of which she was ex officio chairman. Both jobs went to her number two, Special Secretary S.S. Chattopadhyay. Aggarwal was left with such exalted tasks as arranging night shelter for pavement dwellers in Union territories.

Actually, it was the DMRC which was at the root of the conflict. Estimated at Rs 23,000 crore, the scheme to build an underground railway network in Delhi is the single largest project in Indian history. Naturally, it has the word "lucrative" written all over it. In May, as a first step, the DMRC appointed Japan's Pacific Consultants International (PCI) as general consultant to the project. The general consultant's role is vital. It will choose the firm which will finally execute the project.

In August, Jethmalani studied the relevant papers and decided PCI's selection hadn't been transparent enough. He blamed Aggarwal and E. Sreedharan, managing director, DMRC, for bypassing a concerned committee headed by the cabinet secretary and hastily issuing PCI an appointment letter. He also accused them of keeping from him important DMRC documents from him and of accepting without a murmur PCI's demand of a Rs 440 crore fee.

Jethmalani wrote to the prime minister recommending the CBI look into the matter. Simultaneously, he ordered the process of finding a general consultant be gone through afresh. Meanwhile, PCI sent word to the ministry slashing its fee to Rs 208 crore.

By the end of the month, the bureaucracy had hit back. On August 27, officials in the Urban Affairs Ministry apparently gave Subramanian Swamy -- Janata Party president and the BJP Government's chief critic -- access to papers relating to the M.S. Shoes case. Immediately, Swamy charged Jethmalani with wrongly restoring a "frozen" four-star hotel project on Delhi's Khel Gaon Marg -- Swamy put its value at Rs 350 crore -- to M.S. Shoes. Swamy claimed "a well-known fund-raiser of the BJP, close to the PMO, was behind the move".

The story of the four-star hotel has all the twists and turns of a soap opera. In October 1994, the Housing and Urban Development Corporation (HUDCO) -- which falls under the Urban Affairs Ministry -- invited bids for a building which could be converted into a 363-room hotel.

Pawan Sachdeva -- the chairman of M.S. Shoes who was later embroiled in a stock market scandal -- offered Rs 100 crore, the highest bid. He paid Rs 40 crore soon after and took charge of the building. However, his acquisition turned out to be worthless. The structure HUDCO had built hadn't received a completion certificate from municipal authorities. Nor were electricity, water and sewage lines in place.

An angry Sachdeva refused to pay HUDCO subsequent instalments till it got the clearances. It still hasn't. Instead, HUDCO cancelled M.S. Shoes' contract on January 1, 1996. Sachdeva went to court and won. HUDCO appealed before the Delhi High Court, where the matter rests.

In June this year, Jethmalani called for the M.S. Shoes file and said that the company "be given a fair deal by the Government". Aggarwal objected on two counts. One, the contract being worth over Rs 50,000, it would require the Finance Ministry's approval. Two, it would be injudicious to talk to M.S. Shoes while a court case was pending.

Jethmalani dismissed these as technicalities. M.S. Shoes cannot be penalised for the "incompetence of HUDCO", he thundered. Aggarwal and the other officials were now doubly miffed. As it is two of the minister's personal assistants were running riot. Next, Jethmalani had his own set of priorities, which clearly did not match those of the civil servants. The simmering discontent found expression through Swamy.

Jethmalani's counter-attack was sharp. He reduced Aggarwal to a lame duck secretary, demanded a CBI inquiry against her for leaking papers and dismissed Swamy as a "moral leper" and "master at telling monstrous lies". This round to the minister.

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