Became the fall guy

There is something about Sudini Jaipal Reddy. Even Arvind Kejriwal, who does not much like politicians, has vouched for his honesty and questioned Prime Minister Manmohan Singh’s decision to move him out of the petroleum ministry just when he was making things difficult for Reliance Industries.

If 70-year-old Reddy passes the Kejriwal test, then it is not without any reason. Reddy was urban development minister when the Commonwealth Games scam happened, but he escaped unscathed. Part of the reason was that Reddy avoids taking decisions on controversial issues. One story about his tenure in the urban development ministry concerns a piece of land in Delhi to which two government entitites had laid claim. Reddy refrained from taking a stand and the file lay gathering dust in his office. Within days of Kamal Nath moving into the ministry, the matter was disposed of. “It was a simple case and a decision favouring any one would not have created controversy since both are government bodies,” says an official familiar with the issue.

When Reddy replaced Murli Deora as petroleum minister in January 2011, it was a sort of promotion for the senior leader who had never held any major portfolio and was moved around, rather unfairly, from one ministry to another during the UPA regime. Reddy had started his career in the Andhra Youth Congress but had left to join the Janata Party during the Emergency.

Mani Shankar Aiyar, his predecessor in the ministry, says the government has made things difficult for itself by moving out Reddy. “He is known for his integrity and intellectual competence. He raised valid questions and even after he goes, these will continue to be on the table. Any decision that [Veerappa] Moily [the new minister] takes will have to be rationalised,” he says.

A former head of an oil PSU, who interacted with Reddy, says he “does not reveal his mind so it is difficult to repose confidence in him”. By contrast, Deora was straightforward and assertive.

For officials in the petroleum ministry, Reddy was a sea change. First, S Sundareshan, secretary in the ministry, was moved out after Reddy apparently told the Prime Minister’s Office that he was not comfortable with him. He was replaced by G C Chaturvedi, who had worked with him in the Commonwealth Games organising committee. Next, a joint secretary was asked to move out. Even peons and clerical staff were changed to stop information leaks to corporate houses. “The minister came with the view that all officials were corrupt unless proved otherwise,” says an official. This sent a signal down the line. Officers, who had a field day under Deora, became cautious. Accessible heads of public sector companies stopped interacting with the media.

At the time Reddy took over, the petroleum ministry was grappling with the Cairn-Vedanta deal. The process of sorting out the royalty issue in ONGC’s favour in return for government clearance had started during Deora’s tenure itself. Reddy successfully carried on the task but, as an insider says, “It would have been very difficult for anyone to take a different stand.”

Though Reddy was blamed for Reliance Industries Limited’s (RIL) problems, it was under him that its $7.2-billion deal with British Petroleum was cleared in July 2011. But soon, field development plans for discoveries and commercialities of new discoveries were blocked. The minister was perhaps not directly involved in these issues, but bureaucrats were asked to go by the rule book. So, in July 2012, RIL-BP was told to furnish details to the Comptroller and Auditor General for an audit, pending which clearances would not be made.

Raising petroleum prices was also not easy under Reddy. “If the family member is not interested, then why will outsiders help?” an official says, referring to the postponement of the decision to raise fuel prices earlier this year. Reddy, in this case, is the family and the finance ministry, the outsider. Fuel prices were raised in September, soon after rumours of Reddy being shunted out began doing the rounds but it was clear that Finance Minister P Chidambaram had pushed them through. And less than a week before Reddy was finally shifted to the ministry of science and technology, RIL’s woes too seemed to have ended with the petroleum ministry agreeing to grant clearances and to a waiver of the performance audit.

So while Kejriwal is shouting hoarse that RIL is the reason for the minister’s removal, Reddy had perhaps tried to prevent his ouster with some of his decisions.