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Why a Cabinet decision to pass River Princess deal?

Continuing with our expose ‘Money Grab from Ship Scrap’, GoaChronicle.com investigations into the matter have revealed serious anomalies on the part of the Disaster Management Committee on the River Princess removal and scrap; casting serious doubts on the kickbacks in the deal with Arihant Ship Breakers so much so that it requires a Cabinet decision to pass this deal…

In 2009, the Government of Goa had formed the Disaster Management Committee (Cell) consisting of the Chief Minister of Goa, Digambar Kamat as the Chairman of the Committee, Chief Secretary Sanjay Srivastava, Revenue Minister Jose Philip D’souza, Secretary of Tourism, Government of Goa Dr M Modassir, Director of Tourism, Swapnil Nail and Calangute MLA Agnelo Fernandes. Surprisingly, the Ministry of Tourism has not been taken into consideration into this committee even though Ministry of Tourism and Department of Tourism were considered to be owners of this stranded ship by a government directive in 2002.

Speaking exclusively to GoaChronicle.com in a telephonic conversation from New Delhi this afternoon, Nilkanth Halarnkar, Minister for Tourism, Government of Goa, expressed, “In the assembly I had categorically stated that since we had received an offer of Rs 17 per kilogram from Oceanic Trading on March 6, 2011, as government we need to consider this proposal to ensure transparency in our dealings or else for the purpose of the scrap the government could re-tender the requirement or keep an open auction of the scrap. However, post the assembly discussion my views on the issue have been overruled even so that I have made a note on a file asking for the Chief Secretary and Chief Minister to ensure transparency, yet my statements have been bypassed by both concerned government authorities and file moved forward without my signature or authorization.”

Arihant Ship Breakers (ASB) bid for the contract for the removal of the ship with the scrap, for which they would pay the government Rs 12.70 per kilogram. Though only yesterday an official formal agreement has been signed between the ASB and the Government of Goa after 45 days since ASB has already commenced its work, though our sources in the tourism department reveal that internally there does exist an understanding between few members of the Disaster Management Committee and ASB on this deal; therefore offers from two other companies of Rs 19 and Rs 20 per kilogram has been not considered by the government including the Rs 17 by Oceanic Trading.

The estimated 11,325.7 metric tons of scrap was valued by two government appointed valuers Uday Bohgate & Associates and Ericson & Richards; the first valued the scrap at Rs 14 crore, the latter at Rs 14.1 crore. The highest valuation being Rs 14.1 crore, even if we are to consider the government’s appointed valuer, then the price of Rs 12.70 is beyond the expected price that the government is taking from ASB. The letter for appointing the valuers was sent by the Collector of North Goa on behalf of the Disaster Management Committee.

However GoaChronicle.com in its research on the subject and valuation of the scrap, spoke to a few noted valuers in the business who claim that the estimated valuation of the scrap at best should be between Rs 21 to Rs 24. However, the scrap dealers would need to take into account the cost of storing, loading and unloading in barges and ship transportation. So a fair price should have been between Rs 17 to Rs 18 per kilogram to a maximum of Rs 20.

In a view of getting a legal opinion on this issue the Chief Minister Digambar Kamat some months ago forward the matter to the Advocate General Subodh Kantak and Ex-Advocate General Atmaram Nadkarni who were to also draft the contract between Goa government and Arihant Ship Breakers. The Ex-Advocate General was of the opinion that if the government getting a better rate than the existing one from ASB, it would be better for the government to either have an open auction or invite new tenders for the scrap removal.   Tourism Minister Nilkanth Halarnkar was of the same opinion to either give it to the highest bidder which had approached the tourism department; or if not have an open auction or invite new tenders for the same.

The Disaster Management Committee through its Chairman – Digambar Kamat is planning to pass this deal through a Cabinet decision which is to happen on April 28, 2011. The estimated loss the government exchequer is to be around Rs 10 crore.

Somewhere in the year 2000, the River Princess had hit Sinquerim-Candolim shore due to rough weather. Several attempts to tow away the ship had failed, finally forcing the State Government to allow its cutting. After spending almost 12 years on the shore, the ship has gone eight meters deep underwater in the sand. Some factors such as the ship going eight meters deep into the sand or its BARC clearance to remove some radioactive material from the some parts of the ship, which has not yet come;  have not yet been addressed adequately.

Further answering to questions on this issue Halarnkar stated that the eventuality of this deal is not under his jurisdiction as his views have not been considered, hence the anomalies in the deal and all related questions should be raised with the Disaster Management Committee and its Chairman.

Speaking to the Leader of the Opposition party through a telephonic conversation, he told GoaChronicle.com that entire deal with ASB is a scam, right from the tendering process to the scrap removal. Since in 2005, the government had offers of Rs 6 crore for floating and removal; the price of cutting and removal at Rs 99 crore in 2011 in itself highly questionable. He also maintains that the information he has received from his sources on the true value of the scrap should be between Rs 18 to Rs 20 per kilogram.

If however the Cabinet does pass a decision on the River Princess; the estimated loss to the government being aware of the other offers will lead to an estimated loss of Rs 10 crore on the minimum; yet one fails to comprehend the actions of the government in this deal.

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