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Thursday, March 3, 2005


Press statement of the Chief Minister, J. Jayalalithaa on March 3, 2005


The Union Finance Minister, Mr. P.Chidambaram, has on 28.2.2005 talked to the media and blamed the Tamil Nadu Government for the delay in starting the Rs.1000 crores Desalination Plant for providing drinking water supply to Chennai. He has also said that the Centre waited till 25.2.2005 to hear from the State Government on whether it had selected the bidder for the plant and as there was no response, no provision was made in the Union Budget for this project. He has also said that since water was a state subject, the State Government had to be consulted on this issue. Thus, Mr. Chidambaram has held forth on the subject of a desalination project for Chennai with scant regard for the real facts of the issue.


The big brother attitude of Mr. Chidambaram deserves outright condemnation. It would appear that he expects State Governments to bow and scrape before him. Suddenly it has dawned on him that the state governments have to be consulted on the issue as the subject is in the state list. Why did he not consult the State Government in the first place before he made a grand announcement in the Central Budget in July 2004? Did he then consult the State Government? Obviously, he did not. He and his cohorts in the DMK were hell bent on picking up every issue to run down my Government, flushed with the success following the results of the Parliamentary elections. So, straight away, without bothering to even check up as to what was the position relating to the Desalination Plant already announced by the Government of Tamil Nadu, Mr. P. Chidambaram proceeded to pencil in a grant announcement in his Budget speech in July 2004. Mr. P. Chidambaram should first ask himself whether it was ethical and proper on his part to portray an on-going scheme of the State Government to implement a 300 MLD Desalination Plant as a scheme being taken up by the Centre? Having attempted this, he is now pontificating about the State Government's role in the matter. This is more reprehensible.


It is important to place on record the correct facts. The Government of Tamil Nadu first announced its intention to implement a 300 MLD Desalination Plant on 2.5.2003 itself. Mr. Chidambaram was nowhere on the scene at that time. The Central Government was not at all in the picture. Right from the beginning the State Government had declared that the project would be executed on a DBOOT (Design, Build, Own, Operate and Transfer) basis. Tenders were called for on this basis on 2.5.2003. One bidder took the case to the High Court of Madras and the High Court of Madras gave a stay. Ultimately, the High Court upheld the position of this Government only in October 2004, and passed strictures against the bidder including levying a penalty on the bidder. Thereafter, the State Government called for bids again in November 2004. There has been no delay whatsoever. The moot point is that when the State Government had taken up the scheme way back in May 2003 how did Mr. Chidambaram who suddenly appeared on the scene in July 2004, say in his Budget speech for 2004-05 that the scheme will be implemented by the Central Government in the State Sector? What does this mean? This was done without any consultation with the State Government leaving the State completely in the dark as to what was happening.


It is thus obvious that Mr. Chidambaram with a sleight of hand wanted to take credit for an on-going scheme of the State Government to establish a Desalination Plant through a grandiose announcement in last year's Union Budget. Will Mr. Chidambaram come clean on what provision he actually made in the Central Budget for this project at Chennai in the year 2004-05? Further in his Budget announcement itself, he made a vague statement that this would be part of such plants to be installed along the Coromandel Coast through Public Private Partnership. Most people, including mediapersons, are under the mistaken impression that Mr. Chidambaram announced a specific allocation of Rs.1000 crores for the proposed Desalination Plant at Chennai. This is factually incorrect. Here is the extract of what Mr. Chidambaram actually said in his Budget Speech for 2004-05.


"The City of Chennai and other cities suffer from acute scarcity of drinking water. It is proposed to install the first large desalination plant near Chennai in the State sector, and more such plants will be installed along the Coromandel Coast. A desalination plant with a capacity of 300 million litres per day (MLD) is estimated to cost Rs.1000 crores, and there will be other costs for transmission pipelines and a captive power plant. It is proposed to implement the project through public-private partnership."


Now, a pretence is made as if the Centre had offered Rs.1000 crores for the plant. In the Central Budget, all that seems to have been allocated as per the First Supplementary Estimates made in September 2004, was a meagre sum of Rs.5 crores. This kind of drama should be stopped forthwith, namely, trumpeting that the Centre was willing to give Rs.1000 crores and the state was not taking it. This is an utter travesty of the truth.


When the State Government had already proceeded to implement the project on a DBOOT basis, instead of supporting the State Government, Mr. Chidambaram has attempted to run the project from his end. This was totally unnecessary and uncalled for. The right thing to do for Mr. Chidambaram was to involve the state Government before he even thought of making an announcement. It is because of this unilateral approach that Mr. Chidambaram now finds himself in a corner. And when cornered he is making baseless statements without an iota of truth.


Now, Mr. Chidambaram while talking of the Budget, for 2005-06 and the reason why he has not made any provision for the Desalination Plant at Chennai, gives a curious reason, namely that he had waited for the results of the State Government / Chennai Metropolitan Water Supply and Sewerage Board's bid which was opened on 16.2.2005 and since no information was available up to 25.2.2005, he could not make any provision! This is an amazing explanation and clearly an exercise in escapism. When a bid for a major contract is opened, is it Mr. Chidambaram's contention that the evaluation can be completed in 10 days time? In fact, a consultant is undertaking the technical evaluation of the bids right now. Surely, Mr. Chidambaram knows how long a detailed technical evaluation will take in a large project. It will take a minimum of 60 days to complete the evaluation. When this is the position, it is churlish on the part of Mr. Chidambaram to quote this as a reason for not providing funds in the Union Budget.


If Mr. Chidambaram is honest about supporting the State Government in the project, there is no problem. In fact, my Government has formally addressed the Government of India in December 2004 to extend financial support for the desalination project on a DBOOT basis being undertaken by the Government of Tamil Nadu. Financial assistance in the form of viability gap funding has been requested. Also, financial assistance for a payment support mechanism has been specifically requested. On this basis, Mr. P. Chidambaram could have allotted funds in the Budget Estimates 2005-06. He has not chosen to do so and instead he is giving some vague reason in a fit of pique. This kind of word play to malign my State Government will not wash. The facts speak differently.


There is a tendency on the part of Union Ministers from Tamil Nadu to ignore major projects relating to Tamil Nadu. The most crucial project relating to Tamil Nadu is the Interlinking of Rivers and the Peninsular River Water Grid. There is no mention about this in the Union Budget. There is no indication of the LNG terminal at Chennai. The Union Ministers are talking of how Kerala got Vallarpadam when the fact is Colachel and Tuticorin in Tamil Nadu have been totally neglected. In the Union Budget Mr. Chidambaram talks of Mumbai and ignores Chennai. What about Chennai's new International Airport?


Instead of attending to all these projects, Mr. Chidambaram seems keen only to trouble the Tamil Nadu State Government on the desalination project which it is in any case implementing.


Instead of crying hoarse at the State Government for not availing of assistance from the Central Government for the Desalination Plant, Mr. Chidambaram would do well to provide assistance as sought for by the Government of Tamil Nadu for the project to be executed by the Government of Tamil Nadu. He should at least now abstain from such attempts to besmirch the State Government on the issue of a project that the State Government is legitimately competent to execute. Such brazen attempts to achieve political mileage in a matter so crucial as providing drinking water supply on a long term basis to Chennai is most unfortunate. Cooperative federalism requires proper consultation and mutual respect. It cannot be that a didactic position is taken and statements issued at will. My Government will implement the desalination project notwithstanding the fact that Mr. Chidambaram has not provided any assistance for this project in the Union Budget for 2005-06.


J. Jayalalithaa
Chief Minister of Tamil Nadu

The Hindu