Did Narendra Modi force Britain’s hand?
Of all the stories floating around on Britain’s decision to resume direct contact with Gujarat chief minister Narendra Damodardas Modi, this one’s the most interesting. It even has the hint of a conspiracy.
It has to do with the Oct 4 acquisition of Gujarat Gas Company Ltd (GGCL), India’s biggest private sector gas distribution company, from British Gas (BG) by a consortium led by the state-owned Gujarat State Petroleum Corporation (GSPC). Coming just a week before the UK’s Oct 11 decision to resume talks with Modi, some BJP insiders say the move was aimed at giving the Brits a taste of Modi’s muscle power (as if any were needed) and thus speed up the reversal of the UK’s 10-year-old no-direct contact policy.
Here are the bare bones: GSPC announced on Oct 4 that its consortium had bought BG’s massive 65.12% controlling stake in GGCL at Rs. 295.00 per share. The total deal was worth nearly Rs. 2,500 crore. But the reportedly low price and the way the deal was struck and concluded set off speculation.
In April 2011, 400 textile processing companies belonging to the South Gujarat Textile Processors Association (SGTPA), a powerful lobby, went on a three-day strike to protest a hike in the price of industrial gas delivered by GGCL, only calling it off after assurances by the central petroleum ministry.
By July 2011, factories were starting to shut down. SGTPA president Pramod Choudhary told the Indian Express that Narendra Modi had announced a “Five F” policy for cotton — Farm, Fibre, Fabric, Fashion and Foreign. “We are eagerly waiting for this policy for a better future of the industry,” he said.
In Nov 2011, with just over year to go to Assembly elections in Gujarat, Modi’s government filed a complaint with the Competition Commission of India over high prices being charged by GGCL, which is a city gas distributor supplying natural gas to over 300,000 domestic consumers, 6,000 businesses and 800 industrial consumers in Surat, Bharuch and Ankleshwar, supplying gas from a network of 3,700 km of pipelines. The SGTPA filed a similar petition but the Competition Commission rejected both.
In late 2011, BG announced it was disposing of its majority stake in GGCL, reportedly because it needed the money to invest in other markets. But further twists followed. According to reports in the Times of India, Modi may have arm-twisted two interested major private companies in Gujarat – Adani Power and Torrent Power – out of the bidding process.
According this TOI report, ‘Adani and Torrent stopped from bidding for BG stake in Gujarat Gas’ the two companies were conveyed “the wishes of minister of state for energy Saurabh Dalal that they should not bid.”
Apparently British Gas’s asking price was Rs. 4,500 crore but with the consortium of GSPC (50%), Oil and Natural Gas Corporation (25%) and Bharat Petroleum Corporation Ltd (25%) left as the only bidders, the price was beaten down to Rs. 2,464 crore.
The move has led to hopes of a fall in gas prices among textile processors in Surat, Bharuch and Ankleshwar in what is said to be the country’s biggest man-made fabric industry. Which would be a shot in the arm for Modi ahead of the Assembly elections.
Here comes the conspiracy theory: according to some Modi strategists, economically vulnerable Britain was always the most likely to buckle under pressure and resume relations with Modi, which in turn would lead to turnarounds in Europe and the United States (which has a visa ban on him), and thus end Modi’s pariah status in the West. The pressure tactics over British Gas, say these theorists, hastened a likely move.