Too much 'security'

There has been speculation about why Subir Raha did not get an extension of his term as chairman of the Oil and Natural Gas Corporation (ONGC). Media reports suggest that, more than the TNR Rao report on the Bombay High oil platform, what killed all chances of his staying on in the job was the endorsement of the Rao report by the National Security Advisor, MK Narayanan. Mr Narayanan is reported to have said that the management lapses that led to the fire constituted a threat to national security! Some months ago, when mobile phone major Hutch's Indian partners, the Ruias of Essar, asked whether an Egyptian company (Orascom) could buy into Hutch International without the Government of India's approval (as this would translate into a beneficial stake of over 10 per cent in Hutch's India operations), Mr Narayanan was asked to comment on the matter; he said the matter needed to be examined in its entirety. Nothing has been heard since then on the issue, and Orascom did not increase its stake to a level that would lead to its indirect Indian stake rising beyond 10 per cent.

Those are not the only places where national security has raised its head. In the case of the Mumbai port terminal, bids have been put on hold for more than three years now, as the government is not able to make up its mind on whether Hutchison Whampoa should be allowed to participate. If Hutchison is not a security threat when it comes to telecom, why should Hutchison be a threat when it comes to shipping""since customs formalities will remain outside its control? By way of contrast, in the case of Dubai Ports, over which the US got paranoid on security grounds, the government here has no problem with it controlling all or part of Nhava-Sheva near Mumbai, Kochi, Chennai, Vizag and Kulpi in Kolkata! And, it may be recalled, the NDA government had raised the security issue when it came to Jet Airways' shareholding. All of which raises the question: Where does business end and security begin?

Among all these cases, the one hardest to understand is Mr Raha's. Whether the chief of a state-owned undertaking needs to get an extension has to be decided on the merits of his/her performance and ability; it is hard to understand how the National Security Advisor can have a role to play. Sure, a fire on an oil platform reduces energy (and therefore overall) security, but that can be said about anything, from delay in building up strategic oil reserves to failure to predict the level of wheat procurement in one season. So, is the worthy Mr Narayanan's opinion to be sought on all these and other similar matters?

The problem with bringing security into business decisions is that it is by its nature a non-transparent factor""and anything can be said about anyone, usually with little or no hard substantiation. Naturally, people use security to derail or delay decisions and projects. In the Orascom case, the issue was almost certainly raised as a diversionary tactic, in what was a tussle between Hutch and the Ruias (who are major shareholders in the Indian Hutch). In the case of Jet, nothing was finally established one way or the other but the airline has now been allowed to fly on international routes. Even consistency in applying concepts seems to be difficult, as with the ports. And let us not forget that China was Enemy No. 1 yesterday, but something else when Pranab Mukherjee goes visiting.