Nomura said it believes that the soft patch of data in passenger vehicles and two-wheelers should be seen as a consolidation phase before the next upmove. It remains upbeat on strong volume growth recovery across industry segments in FY16
Auto volumes during October 2014 remained soft with both car and two-wheeler sales declining. However, medium and heavy commercial vehicles (MCHVs) volumes picked up quite strongly in October, which according to Nomura was a positive surprise.
"Overall, MHCV industry volumes picked up quite strongly in October – industry volumes were up 27% compared to our estimate of 14% growth. After a few months of consolidation, the upmove in SAAR is clearly visible and now points to a 14% y-y growth in FY15F. This implies about 30% growth in second half of FY15F in comparison to 1% volume decline in first half," Nomura said in a note.
All original equipment manufacturers (OEMs) reported stronger than-expected volume growth during October 2014. Tata Motors' domestic HMCV volumes increased by 30%), Ashok Leyland’s volumes were up 43% and Eicher’s CV volumes were down 5% while seasonally adjusted annualized rate (SAAR) was indicating around 10% decline. Nomura said, "With improvement in economic growth, we expect MHCV industry volumes to see further improvements in the coming months."
Volumes in other auto segments were soft in this month – car industry volumes declined by 4% and two-wheeler industry volumes were down 4%. Nomura said, "We believe that the soft patch of data in passenger vehicles (PVs) and 2Ws should also be seen as a consolidation phase before the next up move. Overall, we remain upbeat on strong volume growth recovery across industry segments in FY16F."
Maruti Suzuki India Ltd (MSIL) domestic car volumes increased by 1% in October. As per the company, production was impacted due to higher number of holidays – there were only 19 working days in October 2014 compared with 24 days same month last year. Further, complete product ramp-up of new Alto K10 has not yet happened. Retail sales for MSIL were strong at 1.08 lakh units, up 10% with inventory levels below four weeks currently.
Among unlisted OEMs, Hyundai and Honda reported decent numbers with volume growth of 6% and 19% y-y,respectively, while other OEMs such as Ford, GM continue to see steep declines.
Most of the two-wheeler OEMs reported weaker-than-expected volumes. Hero MotoCorp (HMCL)’s volumes declined by 8%. Honda Motorcycles and Scooters India Ltd (HMSI)’s volumes were flattish as bike volumes declined by 6% while scooter volumes were up 6%. Bajaj Auto’s domestic bike volumes were down 13%. TVS had a strong month with domestic two-wheeler volumes up 18% led by strong scooter volumes.
A CBI official said that the arrests were made “on allegations of criminal conspiracy, cheating and diversion of funds”
The Central Bureau of Investigation (CBI) arrested Ramchandra Hansdah, a Biju Janata Dal (BJD) member of Parliament; Hitesh Kumar Bagarti, ex-MLA from the Bharatiya Janata Party; and Subarna Naik, ex-MLA from the BJD. The arrests were made in connection with the Nabadiganta group case, one of several chit fund scam cases in Odisha. A CBI official said that the three were arrested “on allegations of criminal conspiracy, cheating and diversion of funds”.
CBI officials familiar with the matter told journalists that the three leaders were former directors of Nabadiganta Capital Services Ltd, a ponzi group. CBI has been probing the activities of 44 ponzi companies in the state which allegedly duped thousands of investors of their money.
A few days back, the central agency had arrested BJD MLA Pravat Tripathy for his alleged involvement in the Artha Tatwa Group case in Odisha.
After refusing to share contract documents for years, the UIDAI finally provided it under the RTI Act, with important pages missing
In the matter of Right to Information (RTI) application, on 14 October 2014, Vijay Bhalla, Deputy Registrar, Central Information Commission (CIC) wrote a letter on behalf of Sharat Sabharwal, Information Commissioner, CIC to Central Public Information Officer (CPIO) & Deputy Director, UIDAI. The letter states, “I am directed to convey that you should, within two weeks of the receipt of this order, provide to the Appellant the limited information i.e. financial quotation/ price by the third party firms in the subject tender as disclosure of it would not inflict any harm to the competitive position of third party firms at this stage when the contracts have already expired.”
The RTI application was filed seeking a complete copy of the contract UIDAI signed with L1 Identity Solutions for Biometric Technology, on 24 August 2010 and a copy of the contract UIDAI signed with Accenture for Biometric Technology, on 1 September 2010.
Responding to this letter, Subrata Das, the CPIO & Deputy Director, UIDAI wrote to the RTI Appellant on 22 October 2014 in compliance with the CIC decision on the second Appeal hearing dated 30 September 2014.
UIDAI’s letter reads, “The requisite letter in compliance with the CIC decision is as under:
(i) financial quotation/ price quoted by Accenture Services Pvt Ltd is Rs2.75 (inclusive of taxes) as a unit price for Enrollment Allotted Transaction for De-duplication Services
(ii) financial quotation/price quoted by L1 Identity Solutions Operating Company Pvt Ltd is Rs2.75 (inclusive of taxes) as a unit price for Enrollment Allotted Transaction for De-duplication Services
This reply implies that for each of the 100 crore Indian residents targeted for Aadhaar enrolment, the taxpayer through the central government will have to incur the cost of Rs2.75 to the companies in question. This is significant because this is not a one-time cost but each time de-duplication of Aadhaar number is done, the cost will be incurred.
Besides other gnawing concerns about an assault on human rights, national security, economy and sovereignty, this is yet another case of foreign companies withholding transfer of technology from developing countries.
It is also relevant to recall that two US based corporations, HP and IBM, had challenged UIDAI's tender processes. They had objected to their technical disqualification. The Rs2,000 crore contract for UIDAI's tender for managed service provider was won by Wipro Technologies. The Economics Times had reported on how the UIDAI tender process was unfair.”
Notably, the 'Strategic Vision on the UIDAI Project' document that was prepared and submitted to the processes committee of the Planning Commission (set up in July 2006) by Wipro Ltd (consultant for the design phase and programme management phase of the pilot UIDAI project).
It is noteworthy that the decision of Sharat Sabharwal, Information Commissioner, CIC and the letter of UIDAI furnishing "Limited Financial Information" is contrary to the original order of Sushma Singh, the Information Commissioner, CIC dated 21 October 2013. Mr Sabharwal’s order appears indulgent towards the UIDAI and the foreign companies in question.
The sequence of events in this regard is quite germane for understanding the issues at hand. The Biometric Service Providers, namely, Satyam Computer Services/Sagem Morpho, L1 Identity Solutions and Accenture Services had responded to UIDAI’s Expression of Interest (EoI) and submitted their tenders for accepting the projects on the basis of fulfilling the following clauses:
a) The prime respondent should have an office in India in the form of a Registered Office.
b) If the prime respondent does not have a Registered Office, then it should have a Branch office, Representative Office, Sales Office, or an office of its subsidiary company in India for the purpose of submission of the expression of interest response.
c) If the prime respondent is unable to meet the stated conditions, it shall submit a declaration/confirmation stating that it shall have Registered Office in India for the purposes of signing contracts with the UIDAI.
But in its letter dated 21 July 2011, the UIDAI stated that “There is no means to verify whether the said companies/ organizations are of US origin or not. As per our contractual terms and conditions, only the companies registered in India can bid.” If that is indeed the case then the UIDAI will have no means to verify whether Sagem Morpho and later L1 are of French origin or not.
Subsequent RTI applications forced UIDAI to share contract agreements with these companies, which clearly stated their countries of origin. This establishes that the UIDAI did have the means of verifying the foreign origin of the companies in question. It indulged in misrepresentation of facts with impunity.
If the letter of 14 October 2014, Vijay Bhalla, Deputy Registrar, CIC is read with the interim order of Sushma Singh, Information Commissioner, CIC dated 26 July 2013, it become abundantly clear that UIDAI had raised the issue of Third Party’s trade secret and propriety information and the same was responded to by the author in writing. The order reads: “The appellant’s representative filed written submissions before the Commission, which inter-alia states that denial of information is not in public interest.
The people of India have a right to know the details of the contracts issued by an Authority set up under an order of the Executive and the Authority claiming to act on behalf of the Government of India, entering into contracts with private firms, both foreign and Indian. Since the contracts are paid from Government funds and the project for which the contracts have been given pertained to the collection and processing of personal information of every person residing in India, including the citizens, the people have a right to the said information.”
In her order, she asked the UIDAI to provide “written submissions, justifying non-disclosure of the information sought by the appellant under the provisions of Section 8 (1) (d) of the RTI Act.” The matter was scheduled for hearing on 10 September 2013.
On 10 September 2013, UIDAI failed to provide the “written submissions, justifying non-disclosure of the information sought by the appellant under the provisions of Section 8 (1) (d) of the RTI Act”. UIDAI realized that it does not have any defence under the said RTI Act for denial of information. It submitted a letter (No. F.2013/096/2012-RTI-UIDAI) dated 10 September 2013 to Sushma Singh, Information Commissioner, CIC.
On 10 September 2013, the author attended the hearing at the Central Information Commission (CIC). Shirish Kumar, Assistant Director General (ADG), Unique Identification Authority of India (UIDAI) and Shalic Das, ADG, UIDAI, were also present during the hearing, wherein the CIC sought an explanation from the UIDAI about their refusal to share a copy of all contracts given to biometric technology companies, namely, L1 Identity Solutions and Accenture. To which the UIDAI “submitted before the Commission that the copy of the said contracts can now be provided as the contracts have now expired.”
The UIDAI gave a written submission to the CIC (No.F12013/096/2012-RTI-UIDAI) stating that "contractual obligation with respect to BSP's (Biometric Solution Provider) contracts had expired. Therefore, UIDAI has no objection in sharing the following contract details :-
a) Copy of contract of UIDAI with L1 Identity Solutions for Biometric Technology; and b) Copy of contract of UIDAI with Accenture for Biometric Technology".
Taking this submission into account, Sushma Singh, Information Commissioner, CIC gave her final order saying, “In view of the above, the Commission hereby directs the respondent (UIDAI) to provide a copy of the two contracts to the appellant within two weeks from the receipt of the order.” This order demolished the reasoning behind the claim of UIDAI for denial of contract agreements of these foreign companies. UIDAI had stated that “The information relating to the referred contracts cannot be disclosed as per clause 8.1 (d) of RTI Act, 2005” in its letter dated 7 May 2012.
Following the hearing, the author met Shirish Kumar, ADG, UIDAI at their office in Jeevan Bharti Building, New Delhi who gave me copies of the contract of UIDAI with L1 Identity Solutions for Biometric Technology and Accenture for Biometric Technology.
After examining the contract agreement with regard to the Accenture for Biometric Technology, the author noticed that the first 237 pages of the contract agreement were in order but after that there is a one pager titled Annexure J Technical Bid Technical Bid as submitted by Accenture Services Pvt Ltd but the Technical Bid document is missing.
After that there is a one pager titled Annexure K Commercial Bid Commercial Bid as submitted by Accenture Services Pvt Ltd but the Commercial Bid document is missing.
With regard to the L1 Identity Solutions for Biometric Technology, the author noticed that the first 236 pages were in order, but a one pager titled “Annexure I Non-Disclosure Agreement as submitted by L1 Identity Solutions Operating Company Pvt Ltd” is missing. After that there is a one pager titled Annexure J Technical Bid as submitted by L1 Identity Solutions Operating Company Pvt Ltd., which is missing. After that there is a one pager titled Annexure K Commercial Bid as submitted by L1 Identity Solutions Operating Company Pvt Ltd., which is missing.
This compelled the author to write to Shirish Kumar, ADG, UIDAI about the “Missing Pages from the contract agreement of UIDAI and foreign biometric technology companies, CIC Case No. CIC/SS/A/2012/003157,” asking him to share the missing papers. It was/is evident that although the CIC asked the UIDAI to share a copy of the contracts, it chose to violate this order and shared truncated and selected parts of the contact agreement.
Shirish Kumar responded on 20 December 2013 claiming, “There are no missing pages in the two contracts…Some of the pages in the above contracts have only references of Annexures. The annexures J&L w.r.t Accenture Service Pvt Ltd mentioned Technical Bid and Commercial Bid. The annexures I, J, & K wrt to L-1 Identity Solutions Operating Pvt Ltd mentioned-non disclosure Agreement, Technical Bid and Commercial Bids.” The very next paragraph of his letter revealed the inconsistency of his claim.
He further stated, “As per Confidentiality Disclosure statement, the document contains confidential information of the above firms and they have requested not to disclose the information outside UIDAI or be used for purposes other than the evaluation of their business capabilities. Secondly, this being third party information, the firms were requested for their comments, wherein they had declined to share their documents with any applicant.”
Tomorrow: Guaranteed revenue flow for MNCs by Modi govt? –Part2
(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)
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