[Reader-list] Other Concerns - Corruption & PPP

[Rakesh Iyer]

Dear all

In continuation of my idea of also putting articles and commenting on issues
other than identity, I now turn to corruption in this mail. This is a very
shocking article, particularly as it points towards a former president and a
role model for the Indian middle class, being indirectly involved in
corruption and nefarious action, which I strongly believe should be
investigated.

Regards

Rakesh
*
The Drip Starts Here *

* Dial an EMRI ambulance? That's one costly call.*

 SAIKAT DATTA   Refused to comment on his role as board chairman that
resolved to keep politicians in "good humour".
*A.P.J. Abdul Kalam, Former President*


"EMRI is in touch with all sorts of citizens...for feedback on improving
emergency responses in the PPP framework."
*Venkat Changavalli, EMRI CEO*


Resigned from EMRI but was part of Satyam’s reconstituted board. Refused to
comment on EMRI or his role.
*Kiran Karnik, Ex-NASSCOM chief*


"Whoever drafted the proceedings is flippant or foolish. Building a hospital
would be clear conflict of interest."
*Jayaprakash Narayan, Loksatta founder*


Tarun Das did not respond to queries; Krishna Palepu (right) said he "didn’t
recall the discussion".

***
The Emergency Management & Research Institute (EMRI) is a "not-for-profit
professional" organisation which runs a much-lauded emergency ambulance
service in nine states. It also has on its governing board such luminaries
as former president A.P.J. Abdul Kalam, ex-ICICI chairman K.V. Kamath and
ex-nasscom chief Kiran Karnik. But it appears that EMRI, floated by
disgraced Satyam chairman Ramalinga Raju and his family in 2005, has
indulged in clearly questionable practices. Documents accessed under the rti
from the Union ministry of health and family welfare reveal shocking facts
about EMRI and its impressive growth across the country in the last four
years.

Needless to say, EMRI has managed to wipe out any references to Ramalinga
Raju. He had roped in the big names like former president Kalam and others
to give it a high profile as it sought government funds—under private public
partnership (PPP)—to start the hi-tech emergency ambulance service.

The health ministry-released documents show that EMRI's management practices
left a lot to be desired. Buried in the documents are the minutes of a
governing board meeting held on October 20, 2008, at the EMRI campus in
Hyderabad, chaired by none other than former president Abdul Kalam. Among
the attendees were Raju, Kiran Karnik, Loksatta founder Dr Jayaprakash
Narayan, CII chief mentor Tarun Das and Dr Krishna Palepu, senior professor
at Harvard (the last three through video conferencing), and EMRI CEO Venkat
Changavalli. While reviewing the performance and discussing EMRI's future
plans, this is what the board summarised:

   - Be in touch with Opposition leaders in each state and keep them in good
   humour.
   - Be careful of competitors and their criticism and check factors to
   neutralise.
   - Carefully monitor local media and statements made by politicians.
   - Finalise plans to set up an emergency hospital at EMRI as a model.

*Outlook* has quoted verbatim from the minutes of the meeting. The
questionable clauses here is why EMRI would want to "stay in touch with
Opposition leaders" in the states it was operating in? And what was the need
to keep them in "good humour"? How exactly was EMRI planning to do this? And
why should a non-profit outfit keep a watch on the competition?

When contacted, none of the board members, including Kalam, Karnik and Das,
offered any explanation. They either refused to comment or sidetracked the
questions. CEO Changavalli's cryptic comment was that "EMRI is in touch with
citizens from all walks of life to receive their feedback for improving
emergency response services in the PPP framework".

Another board member had a different explanation.Dr Jayaprakash Narayan of
Loksatta, an ngo that works towards transparency, accountability and good
governance had this gem to offer: "Clearly, whoever drafted the proceedings
(of the meeting) is flippant or foolish. I do not recall the details of the
discussion but the intent of the board is to make the EMRI initiative
non-partisan, and to keep all political parties and civil society informed."
Professor Krishna Palepu distanced himself from the proceedings, stating he
was present through video-conferencing from Boston and only "listened to a
small part of the meeting", and "did not recall the discussion".


Li’l humour: Extracts from the minutes of the Oct 20, 2008, EMRI board
meeting chaired by ex-prez Abdul Kalam
Click here for large image <javascript:void(0);>

Strangely, the members were also unwilling to comment on several other
contentious issues. It is a fact that though Raju and family had promised
"leadership, administrative and five per cent of the operational expenses of
EMRI", none of that money actually came in. So how was EMRI's top management
being paid astronomically high salaries running into several lakhs per
month? Jayaprakash Narayan says the salaries "were never discussed or
approved by the board".

A health ministry study conducted by the National Health Systems Resource
Centre is revealing here. It confirms that Raju and family have not put in
the promised money for salaries and five per cent operational costs. "It has
been clarified," the study states, "that such a contribution has not been
made in any of the states (where EMRI operated its services)." So were funds
from the state governments (which, under the PPP, were paying 95 per cent of
EMRI's operational costs) being diverted to pay salaries? Only an official
inquiry will throw up conclusive answers.

Worse, the study also raised legitimate concerns about "insufficient
transparency", since there were no members of the state governments on the
board. It noted that EMRI would keep coming back for more public funds,
which could not be denied since the state governments were now "in a
position of having to comply under threat". In effect, EMRI could take the
position that if monies were not sanctioned it would withdraw the ambulance
services, which would raise a huge public outcry. It could literally hold
the state to ransom.

The study also pointed out that most of the MoUs EMRI signed with the states
"have the provision of declaring it a monopoly provider". As a health
ministry official explained, since it solely controlled ambulance services,
EMRI could logically determine which hospital a patient is admitted to.
Also, with a proposed fleet of 10,000 high-tech ambulances, the
pharmaceuticals industry would also be wooing EMRI. As would the medical
insurance sector.

That's not all. An audit by the Rajasthan government of the funds given to
EMRI shows that some of it was misused or unaccounted for. The audit,
conducted by D.P. Khandelwal & Co, chartered accountants, found Rs 2 crore
had been illegally diverted to another cash credit account. (EMRI claimed
that it was moved to a Hyderabad-based bank to "ensure control of
headquarters to exercise smooth functioning".) The audit also states that
EMRI's procurement process was suspicious since tenders of different
companies were received from the same fax number. "This gives rise to the
doubt that these were arranged," the audit states.

While the Satyam scam opened up a Pandora's box, no political leader in
Andhra Pradesh or elsewhere has raised a demand for a thorough inquiry.
Perhaps, EMRI's resolve to keep political leaders in "good humour" is paying
off.
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