The performance of Dr. T. M. Thomas Isaac, who came to the office of Finance Minister of Kerala with the reputation of an economic expert, reminds me of the story of Arthur Conan Doyle, the creator of Sherlock Holmes. It is said that an English county, impressed with the detective hero’s investigative skills, offered a top police job to Conan Doyle, but he could not solve any real-life mystery.
Thomas Isaac is the economist who has risen highest in the State CPI (M) hierarchy. He was the prime mover behind decentralized planning, which was presented as the most revolutionary programme since the first Communist government under EMS Namboodiripad introduced land reforms. It took three or four decades for the people to realize that land reform measure could yield only limited good. The limited nature of decentralized planning became evident in less than decade.
Even when programmes fail, their prime movers can succeed. When the Left Democratic Front returned to power, Thomas Isaac became the natural choice for the post of Finance Minister on the strength of his experience as a legislator and a member of the Planning Board and by virtue of his being on the right side in the party. But all his calculations did not work out. The Chief Minister appointed Prabhat Patnaik, who does not share his and the party’s views on Marxist practice in the age of globalization, as vice-chairman of the Planning Board.
The Finance Minister was among the new faces in the Cabinet who declared war on corruption. As he swept everything clean with the enthusiasm of a bride, the World Bank-aided Kerala State Transport Project for modernization of roads attracted his attention. KSTP was launched in June 2002 when the United Democratic Front was in power. If everything had gone as planned, the projected would have been completed by the end of this month. When the LDF took office it was clear that the time schedule could not be kept. The Malaysian company, which was in charge of the work, demanded the contract amount be raised as work had fallen behind schedule due to lapses on the government’s part, including failure to acquire the required land in time. The government argued that the company had not completed the work even in areas where land was made available. At that time the Public Works Minister’s attention was elsewhere. The Finance Minister took the reins from him.
Thomas Isaac is not among those who consider World Bank money tainted. Yet he did not show much goodwill for KSTP. His public statements of the period suggest that he viewed it as a UDF project. He put in the dock the PWD Minister of the United Democratic Front government and the consultants, besides the contractors. He announced a Vigilance inquiry against the former minister and blacklisting of the Malaysian company. Work came to a standstill. The people were in distress. The Malaysian company’s representative committed suicide.
It was the previous LDF government that had initiated the talks that led to KSTP. Yet it became a UDF project in the minister’s eyes because it was the UDF government that awarded the contract. Projects are dear to politicians not because they are good for the people but because they give them the opportunity to award contracts.
The minister’s efforts to award the contract to someone else did not succeed. Realizing that anyone else would have to be paid more than what the Malaysian company demanded, the government finally decided to pay it what it demanded and ask it to complete the work. Loss and ridicule was what the economist’s expertise gave the State. But he still maintains it is all the fault of the previous government and the officials.
KSTP, with an outlay of Rs. 16.13 billion, was conceived with a view to improving about 1,600 kilometres of road and 77 kilometres of waterways. The World Bank offered Rs. 12.24 billion. The State’s share was fixed at Rs. 3.89 billion. The reasons cited by the Planning Board for the difficulties encountered in its implementation are different from those mentioned by the minister. The Board says it fell behind schedule for several reasons, including faulty design. The State, which was to spend a total of Rs. 3.89 billion, had already spent Rs. 8.21 billion, till the end of last year. Prabhat Patnaik, who is opposed to foreign loans, cites KSTP as a classic example of the pitfalls of foreign-funded projects.
Never did the State government spend the entire fund allocated for the project in the budget. In the first year actual expenditure was Rs.670 million against an allocation of Rs.1 billion, in the second year Rs.1.46 billion against Rs.1.55 billion, in the third year Rs.1.97 billion against Rs.2.35 billion and in the fourth year Rs.3.12 billion against Rs.5.75 billion.. In the fifth year, too, the budget provided for Rs.5.75 billion but the Finance Minister gave only Rs.990 million.
The Malaysian company has agreed to resume work on the project within a month and complete it within two years. In the light of the State’s past experience, further cost overrun cannot be ruled out.
There is material for consolation for Thomas Isaac in the Conan Doyle story. Although he failed as a detective, Conan Doyle was able to make a big contribution to the administration of justice. His strenuous efforts resulted in the acquittal of two persons who were earlier convicted unjustly. His exertions also played a part in Britain’s decision to set up a criminal court of appeal. Let Thomas Isaac also redeem himself with good work in some other area.
Based on column “Nerkkaazhcha” published in Kerala Kaumudi dated December 20, 2007