Electoral bonds: Reflection on the ‘give & take’

The Electoral bonds details now in public domain, thanks to the Supreme Court orders, have once again highlighted the political economy of large infrastructure projects like dams, hydropower projects, irrigation projects and roads. It has confirmed that such large water projects could involve kickbacks to political parties.

The Supreme Court too has hinted at the quid pro quo that such donations can involve.

The details available so far name companies like Megha Engineering, Rithwik Projects Pvt Ltd, Navayuga Engineering Company Ltd, among others.

The projects so far that seem to be involved include Polavaram Dam, Kaleshwaram Lift Irrigation Project, Sunni Dam and Hydro projects, Kundah Pump Storage Hydropower project in Tamil Nadu and the Silkyara Tunnel; some of the have also seen some kind of disaster or the other.

The Election Commission data shows that Hyderabadbased Navayuga Engineering Company Limited, the contractor for the 4.5-km-long Silkyara Bend-Barkot tunnel in Uttarakhand that caved in last November, purchased electoral bonds worth Rs 55 crore between 2019 and 2022.

Rithwik Projects Private Limited (RPPL) a company founded by BJP Rajya Sabha MP from Andhra Pradesh, C.M. Ramesh, purchased electoral bonds worth 5 crore weeks after it bagged the 1,098-crore Engineering, Procurement and Construction (EPC) contract for the Sunni hydroelectric project.

This tranche was purchased just ahead of the Assembly elections in Tripura, Meghalaya, and Nagaland. Two months later, the company again purchased bonds worth 40 crore.

RPPL, a private, unlisted company incorporated in Hyderabad on March 31, 1999, was awarded the EPC contract on January 14, 2023, just days after another project in which it was involved in the controversial Tapovan Vishnugad hydropower project in Chamoli, Uttarakhand.

It was blamed for the collapse of roads and homes at Joshimath, a town located close to the project site.

In less than two weeks after being awarded the Sunni Dam contract, RPPL purchased five bonds of 1 crore each on January 27, 2023. Rithwik Projects reportedly purchased another tranche of 40 bonds on April 11, 2023 worth 40 crore.

This was just ahead of the Karnataka Assembly elections. Mr. Ramesh is a second-time BJP Rajya Sabha MP. He was associated with the TDP until 2019 and was the party’s Rajya Sabha MP from Telangana between 2014 and 2018.

Mr. Ramesh was a close aide of Andhra’s former CM N. Chandrababu Naidu. These claims have been made in a report by South Asian Network on Dams, Displacement and People’s SANDRP, and Reporter’s Collective.

The income tax department had in 2018 accused Rithwik Projects of siphoning off Rs 74 crore through untraceable transactions and of dubious bills to the tune of Rs 25 crore. In 2019, the party’s spokesperson GVL Narasimha Rao had written to the Rajya Sabha ethics committee to seek action against the MP over the income tax department’s allegations of fraudulent transactions.

Ramesh is still a Rajya Sabha member with his tenure set to end next month, the case is pending. Last year, a report by the Association of Democratic Reforms had mentioned his name among MPs with the highest declared wealth in Andhra Pradesh.

Ramesh had declared assets to the tune of Rs 258 crore. Companies involved in the energy business in India donated over Rs 3,600 crores to political parties since the inception of the electoral bonds.

Together, their share is nearly 30% of the total donations through electoral bonds. The list also includes Telangana-based industrial conglomerate, Megha Engineering and Infrastructures Limited (MEIL), which has emerged as the second-biggest donor of the political parties.

Megha Engineering India Ltd (MEIL) MEIL bought a total of Rs 966 crore worth of bonds between 2019-20 and 2023-24.

The unlisted private firm was founded in 1989 by industrialist Pamireddy Pitchi Reddy as Megha Engineering Enterprises, manufacturing pipes for municipalities , is contractor in some of the biggest dams and irrigation projects of India like the Polavaram dam in AP and Kaleshwaram in Telangana, Kundah Pump Storage Project in TN, among others. According to a Crisil report, as of September 31, 2023, MEIL had an order book of Rs 1.87 lakh crore.