Two cats and a bone

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Who really took the money in Kerala’s Lavalin case? Going behind the scene

Paul Zacharia

Illustration: Anand Naorem

KERALA HAS, of late, been consumed by what is widely known as the Lavalin case, related to irregularities in awarding a contract for renovation of hydro-electric projects to Canadian firm SNC-Lavalin in 1998. CPI(M) leader Pinarayi Vijayan, who was the power minister then, was the chief decision-maker in the deal, and he is accused Number 9 in the CBI chargesheet. That Lavalin paid a commission to the Kerala State Electricity Board (KSEB) goes without saying. But who got this money? The CPI(M) is a tightly held centrist power structure. It’s extremely doubtful if any single individual got the money. The money had to be the party’s. That is why when the Lavalin time bomb was detonated during the 2009 election, Prakash Karat bluntly contradicted Chief Minister Achuthanandan and made a public statement that the deal was signed with the knowledge of the Politburo. He was being ethical, so to say, by not letting down a comrade who had acted for the party.

The commission (around Rs 98 crore) was shown as a donation to the CPI(M)-promoted Malabar Cancer Center. After the Congress-UDF government came to power, it was revealed that of the agreed fund only about Rs 12 crore had been paid up by Lavalin – and that too could not be traced. As for the balance, Lavalin later stated that the payment could not be realised as the UDF government had not issued the necessary certification for the work done.

What happened to the money is anybody’s guess. But given the CPI(M)’s internal control modalities, chances are that it couldn’t have been swallowed for personal enrichment as would have happened in a party like the Congress.

It is only natural that the headhunters in the media and opposition will focus on Pinarayi because he oversaw the deal. But there is more to it. Pinarayi suffers from not being the typical politician Kerala is used to. His charisma is limited to an inner circle. He is hardly your regular blue-eyed boy. Though he is known to be a competent administrator, his blunt, business- like ways have brought him more enemies than friends.

Pinarayi’s biggest enemy is his own chief minister. He and Achuthanandan are engaged in a life and death power struggle, and it threatens the future of the party and the government itself. At the core is an old story of the CPI(M) trying to rid itself of Achuthanandan, a liability in its plans to modernise and face a globalising economy and the changing expectations of Kerala voters. The writing is clear on the wall. Paradise is shrinking: attendance at rallies are purchased at daily wages, full-time party workers want to be paid monthly salaries. It’s clear the party has to reinvent itself if it wants to retain its little slice of heaven in Kerala. But Achuthanandan represents the hard-core elements in the party who prefer the status quo.

The Pinarayi and Achuthanandan struggle is as much about power as it is about change in the CPI(M)

The struggle between the two men then is as much about power as it is about change. Achuthanandan, having presided over a disastrous chief ministership, was fighting with his back against the wall to survive, when the Lavalin case came as a godsend. He is now using it to challenge both the Politburo and Pinarayi. The case ensures a boost to his image as a crusader against corruption too. He might even consider a split if his advisers convince him that the media and the people will go the whole hog with him.

As for Pinarayi, the going is tough. He is in a double bind: should he save himself or the party? The CPI(M) is in total ruin, with the collapse of the Achuthanandan administration, the inner party quarrels and the recent election defeat. It is almost certain that the party cannot win the next assembly election. Now, riding on the Lavalin wave, if Achuthanandan decides to take the party on, that will be more or less the beginning of the end of the CPI(M)’s almost half-century old empire in Kerala.

Zacharia is a political commentator and fiction writer

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