Nobody answers why toll is needed for 30 years when every flyway in the country has recovered the investment in three years
It’s a never-ending exposure. No, it is not a defence deal but more serious. The IL&FS exposure is apparently expanding everyday from the initial Rs 91,000 crore. Now, the regulator IRDAI says it is established that insurers are not safe. LIC alone has over Rs 13,000 crore exposure to IL&FS. In other words, this money of insuring people as of now is lost and chances of redemption are thin.
The functioning of IL&FS has been queer as it virtually gave unsecured loans to road builders, who were supposed to collect toll and repay it. The toll was collected alright but the loans were never repaid. So much so that now road construction and the toll collected to operate them could emerge to be the largest procedural scam, possibly larger than the 1992 Harshad Mehta stock scam. It thrives on the State acquiring land with public money, building roads with NHAI money in participation with some private agency and then leasing out the public-funded project to the private player for 30 years! Nobody answers why toll is needed for 30 years when not only the Delhi-Noida-Direct flyway but also many others recovered investment in three years. The high toll, parking charges, airport tax and other levies are leading to exploitation of the masses. It helps groups engaged in the collection of all these, who thrive at the cost of public-funded companies or the model called PPP, which simply means private pilferage of public wealth. The toll gates across the country have become exploiters’ den and for unknown reasons, despite those in power knowing it, they are unwilling to remove these in the name of “facilitation of development.” These, in reality, have become conduits for generating black money through legally sanctioned avenues.
That IL&FS and NHAI are not alone is testified by another Supreme Court observation on the Haryana Assembly amending the Punjab Land Preservation Act (PLPA) 1900, removing protection to the forest cover in Aravalli and thus opening up more than 28,000 acres of land in Gurugram and Faridabad to private builders. The court asked the government to not act on the amended provisions and described the move as a misadventure by the State Government.
Misadventure it all is, be it the IL&FS, rampant clearance of provisions for road and real estate development, the Haryana amendment of PLPA or Jewar airport-like projects in Uttar Pradesh. The Haryana action was aimed at virtually looting the pristine environmental preserve of the Aravallis for the benefit of a few developers and their cohorts. It is none of their concern that the NCR is suffering severe environmental degradation as aquifers are choked and forests devastated, so long as the sharks benefit. And who pays for it? The common man. He is huddled into this degraded space and his cars and other wealth is confiscated for the benefit of industrialists and auto makers. In fact, the worst is happening in Uttar Pradesh. The entire stretch of Ghaziabad, Bulandshahr, Noida, Hapur, Meerut, Agra and Aligarh are being turned into desert as a mesh of roads, highways, expressways and airports are constructed.
No lesson has been taken from the collapse of the Jaypee group which took loans of over Rs 95,000 crore in building Yamuna expressway and large townships. Now it is in trouble looking for an exit through acquisition again by government agencies. In monetary terms alone, the nation has lost over several lakh crore in such ill-thought of non-projects. If the GDP is today shrinking to 6.7 per cent, these mega failures are responsible for it.
IL&FS does not have the money to pay back. Rating agencies have classified the equity of IL&FS as “junk”, which means it is absolutely unredeemable. But in February, the National Company Law Appellate Tribunal ordered that IL&FS and its group companies will not be classified as NPAs as that allows the company to look for write-offs. There have been many defaults by the company in the past with its Managing Director (MD) and many directors resigning. The equity structure of IL&FS is that of LIC and two foreign investors from Japan and Abu Dhabi, who own about 36 per cent of equity. While ways are being found to protect the funds of foreign investors, the common man’s money deposited with LIC and SBI is virtually lost. It is strange that major stakeholders like LIC, SBI and Central Bank did not see the warning signs or act to stop this. Financial analysts estimate that Rs 57,000 crore is the NPA or money virtually lost. In the case of the Jaypee group, the exposure is Rs 75,000 crore.
The RBI in 2016 found an over Rs 5 lakh crore exposure in the real estate and infra locked in NPAs. A big group alone has Rs 1.21 lakh crore unredeemable debts. Many of these have linkages with IL&FS. So be it Uttar Pradesh, Haryana, the NCR and many other large metros across the country, irregularities are being allowed without a check. A national discussion is needed to stop perpetual loot and regression of the development process.
(The author is a senior journalist)
