COVER STORY

The 'Q' connection

With the Indian authorities issuing a non-bailable warrant for his arrest, Ottavio Quattrocchi may well have his back to the wall.

THE Quattrocchi connection in the Bofors scandal, which became obvious after the Swiss Government released the names of the appellants in 1993, figured in a Central Bureau of Investigation (CBI) letter to the Swiss authorities as early as 1990, but only by chance. In January 1990, soon after the first information report (FIR) was filed, K. Madhavan, then Joint Director in the CBI, Arun Jaitley, the then Additional Solicitor-General (now Union Minister for Information and Broadcasting), and Bhure Lal, then a Joint Secretary in the Prime Minister's Office (PMO), were in Berne, carrying a letter from the CBI Director addressed to Pierre Schmid, the Vice-Director of the Swiss Department of Justice. This letter had sought to freeze certain accounts into which Bofors had deposited the commissions. The names of the accounts had been unearthed by The Hindu's investigation. The name of Ottavio Quattrocchi did not figure in the CBI's list of suspected recipients yet.

On the night of January 25, while they were still in Switzerland, the Indian officials learnt of yet another account into which money had been deposited. Thereupon they drew up another list of possible recipients of money from this account along with a supplementary letter requesting a freeze on that account too. Quattrocchi's name first figured in this list, along with a few other names.

Ottavio Quattrocchi

According to the charge-sheet now filed by the CBI, Quattrocchi was in India for almost 28 years - between 1964 and 1993 with a two-year break in between. During much of this period, he had unrestricted access to the prime ministerial residence at Race Course Road and the PMO in South Block. If Congress(I) spokesperson Kapil Sibal had cared to take a look at the security agencies' logbooks in the Prime Minister's residence and office, he would not have made the statement that Rajiv Gandhi had no connection with the Quattrocchis.

Quattrocchi's clout in the rarefied levels of government was legendary. Some of those who were in senior positions in the bureaucracy during Rajiv Gandhi's premiership say that he dropped names unabashedly, walked into Ministers' and Secretaries' offices without prior appointment, and at times even waited outside the venue of Cabinet meetings just in case his presence was needed to clarify a point or make a presentation. Senior bureaucrats who served during the 1980s remember sighting him in the company of Ministers and top bureaucrats. Quattrocchi was generous to those who promoted the interests of his company and vindictive towards those who did not, they say. According to them, officials who resisted the persuasive charms of the Italian businessman often found themselves unceremoniously transferred out or forced to go on leave, sometimes even resign, while those who obliged him were favoured with plum postings. Quattrocchi and his wife Maria threw lavish parties in New Delhi, which were attended by the powerful and the influential.

A retired bureaucrat told Frontline that queries he had raised on a certain project for which Snamprogetti (the company that Quattrocchi represented in India) had bid were answered point by point by Quattrocchi the next day when he dropped in on the former. "How Quattrocchi got to know what points I had raised in my confidential note to the Minister is something that still mystifies me," he said. Informed sources also say that it was not unusual for Quattrocchi to have access to confidential information sent to the PMO. A retired bureaucrat told Frontline that not only did Quattrocchi drop in at his office periodically to lobby for his projects, but soon after his visit there would be calls from two senior Congress(I) functionaries (whom the sources named) inquiring about the fate of those projects.

However, Quattrocchi's clout in the PMO appears to have predated Rajiv Gandhi's prime ministership although it did peak during his tenure. Snamprogetti licensed the technology for fertilizer plants worldwide, supplied certain proprietary equipment and executed engineering, procurement and construction (EPC) contracts on a turnkey basis. The first Indian fertilizer projects executed by Snamprogetti during Quattrocchi's tenure were the Indian Farmers Fertilizer Cooperative's (IFFCO) Phulpur plant with a urea capacity of 1,550 tonnes a day (mtd), four plants of KRIBHCO at Hazira, each with a capacity of 1,100 mtd, and the Trombay V and the Thal Vaishet plants of Rashtriya Chemicals and Fertilizers Limited.

All these were awarded to Snamprogetti during Indira Gandhi's prime ministership and were commissioned between 1975 and 1986. Interestingly, Haldor-Topsoe, a Danish firm, was originally selected to set up the Hazira plant, but the contract went to Snamprogetti eventually. The World Bank, which financed the project, withdrew its support to the project because of certain irregularities in the award of the contract, but the Government went ahead and found other sources of financing the project rather than drop Snamprogetti.

Snamprogetti hit the jackpot when all the 10 plants (including two expansion projects) to be fed by natural gas from the HBJ (Hajira-Bijaipur-Jagdishpur) pipeline came its way during the mid-1980s. While only a few of them were public sector plants and the rest were put up by the private sector, all of them depended on gas to be supplied by the public sector Gas Authority of India Limited (GAIL) from Bombay High through the HBJ pipeline. It is anybody's guess how much leverage the Government would have enjoyed in the choice of technology. Fertilizer industry sources say that at that time a conscious decision was taken to maintain uniformity in technology deployed in all the gas-based urea plants supplied by the HBJ pipeline and therefore Snamprogetti became the chosen technology licensor and EPC contractor for all the projects. However, the sources added that Snamprogetti's technology was among the best available at that time, although they were not sure that their prices were among the lowest.

There was one prized project that Snamprogetti failed to win despite hectic lobbying. This was the Rs.680-crore HBJ pipeline project that was to ferry gas from Bombay High over 1,700 km, traversing the States of Gujarat, Madhya Pradesh, Rajasthan and Uttar Pradesh. Three parties had been shortlisted for the project after competitive bidding - the French firm Spiecabag, Snamprogetti, and a Japanese firm. The French firm had quoted a sum of Rs.150 crores lower than Snamprogetti and was the front-runner. Quattrocchi lobbied furiously for Snamprogetti to be given the contract and went even to the extent of suggesting that the French and Japanese firms be disqualified on technical grounds. But G.V. Ramakrishna, the then Petroleum Secretary, stood his ground and decided to award the contract to the French. Quattrocchi then got a committee (headed by Kaul) set up to review the award. But the Kaul Committee upheld Ramakrishna's award. That Ramakrishna managed to get the French firm to reduce the quoted price by another Rs.34 crores is a little-known fact.

Quattrocchi appears to have had the Midas touch even in Malaysia where he currently heads Snamprogetti's Asia-Pacific Operations in Kuala Lumpur. In 1997-98 alone he is reported to have clinched 17 major petroleum and oil projects for Snamprogetti. However, in Italy some of the individuals and organisations Quattrocchi had been associated with are learnt to be facing corruption charges, rendering it dicey for him to try to return home. With the Indian authorities issuing a non-bailable warrant for his arrest, and with Interpol having issued an alert earlier, Quattrocchi may well have his back to the wall.