Answered: the $333 million question

March 21 – An affidavit sumitted to the Indian Supreme Court on March 9 has at last unravelled the missing money mystery, confirming that R1,505 Crores of the 1989 civil settlement between the Government of India and Union Carbide remains undistributed. Addressing a press conference today three survivors’ organisations demanded immediate payment of the money, which the government has already agreed in principle to do. In the short term, the balance of the settlement fund could make a significant positive difference to the lives of survivors, tens of thousands of whom face destitution.

Rashida Bee, President of the Bhopal Gas Peedit Mahila Stationery Karmachari Sangh said “Thanks to the relentless efforts of our lawyer Mr. S Muralidhar, our stand that there is a balance of over Rs. 1500 crores left in the settlement fund has been vindicated. The government has earlier agreed “in principle” that this belongs to the claimant victims, now it must practice the principle it holds.” The survivors’ organisations also announced a March 25 meeting with the Gas relief Minister to discuss the need for piped water in the contamination affected communities.

You can read the affidavit of the Reserve Bank of India affirming the $333 million of remaining compensation in this DOC1.

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Could survivors finally receive what the Indian government was first given 15 years ago?

Bhopal Gas Peedit Mahila Stationery Karmachari Sangh
Bhopal Gas Peedit Mahila Purush Sangharsh Morcha
Bhopal Group for Information and Action
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March 21, 2004
Press Statement

Addressing a press conference on ‘urgent issues of Bhopal’ today, three organizations active among the survivors of the December ’84 Union Carbide disaster in this city demanded immediate payment of the balance of compensation fund among the claimant victims. They said their claim that over Rs. 1500 crores was left as balance has been vindicated by the affidavit submitted before the Supreme Court of India by the Reserve Bank of India recently. Leaders of the organizations also spoke about the issue they will be discussing with the Minister, Bhopal Gas Tragedy Relief and Rehabilitation at their meeting on March 25, 2004 on supply of piped drinking water to the communities affected by water contamination.

The affidavit of the Reserve Bank of India was submitted on March 9, 2004 in the matter of the Writ Petition filed by Mrs. Rashida Bee, Mrs. Champa Devi Shukla and 34 others on March 5, 2003. In July 2003, the Union of India had filed an affidavit claiming that only Rs. 475.76 crores were left as balance in the compensation fund.

The figures presented in the Reserve Bank of India’s affidavit have been analysed by Mr. Mohan Mani a Corporate Analyst at the Centre for Workers Management in Bangalore and they show Rs. 1505.46 crores as the balance amount on December 31 2003.

Mrs. Rashida Bee, President of the Bhopal Gas Peedit Mahila Stationery Karmachari Sangh said ” Thanks to the relentless efforts of our lawyer Mr. S Muralidhar, our stand that there is a balance of over Rs. 1500 crores left in the settlement fund has been vindicated. The government has earlier agreed “in principle” that this belongs to the claimant victims, now it must practice the principle it holds.”

Speaking on the meeting with the Minister of Gas Relief Mr. Syed M Irfan, President of the Bhopal Gas Peedit Mahila Purush Sangharsh Morcha, said “The meeting will be on one issue and that is supply of piped drinking water from Kolar reservoir to the residents of the 12 communities adjacent to the Union Carbide factory. Summer has already started and the supply of water through tankers to these communities is grossly inadequate. There are too many diseases among the 20, 000 people in these communities from drinking contaminated water and babies are nursing on poisoned milk. They must have piped water without delay.”

Mrs. Rashida Bi, Champa Devi Shukla
Bhopal Gas Peedit Mahila Stationery Karmachari Sangh

Syed M Irfan, President
Bhopal Gas Peedit Mahila Purush Sangharsh Morcha

Rachna Dhingra, Satinath Sarangi
Member
Bhopal Group for Information and Action
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Contact :
1. House No. 12, Gali No. 2, Near Naseer Masjid, Bag Umrao Dulha, Bhopal Tel: 3132298,
2. B-2 / 302, Sheetal Nagar, Berasia Road, Bhopal Tel : 9826167369
For more information please visit www.bhopal.net

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Analysis of figures presented in affidavit of the Reserve Bank of India submitted before the Supreme Court of India on March 9, 2004 by Mr. Mohan Mani, Corporate Analyst, Centre for Workers’ Management, Bangalore.
Tel : 080 23631222, Email : nbamm@vsnl.net
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1. The amount received for compensation was deposited with the RBI, which created two separate accounts a rupee account (Account A) and a dollar account (Account B). The rupee account received the initial rupee payment, and all the interest from various government securities into which the money (both rupee and dollar account) was invested. The money in the dollar account was also held as rupees at a then conversion rate of $6.55 to Rs.100 (About Rs.15 per dollar).

2. All payout as compensation was made from the rupee account. Whenever there was a shortfall in the rupee account, it was made good by disinvesting the securities in the dollar account. However, at the time the government also compensated for the difference in exchange rate, i.e. the rate on the date on which it was originally credited viz Rs 100 per $6.55 and the rate prevalent as on the date of disinvesting the securities. The exchange rate compensation was also credited to the rupee account. As per para 18 of the affidavit, the total amount in the dollar account was (641.22 + 2.15) Rs.643.37 crores.

3. As per para 23 of the RBI affidavit, the total disinvestment from the dollar account was about Rs.167.60 crores. The balance in the dollar account was (643.37 167.60) about Rs.475.77 crores.

4. As per para 24 of the affidavit, the realizable value of the securities as on 31-12-2003 was Rs.578.90 crores. This includes the amount in the dollar account. If all the securities were to be liquidated, the government would in addition to the Rs.578.90 crores also have to compensate for the exchange difference on the dollar account amount.

5. To calculate the exchange difference, we first calculate the dollar equivalent of the balance at $6.55 to Rs.100. This works out to $31.16 crores. Then applying a current exchange rate of Rs.45 per dollar, the present value of $31.16 crores works out to Rs.1402.33 crores. Thus the exchange difference is (1402.33 475.77) Rs.926.56 crores. This amount has to be added to the realizable value of the securities. The liquidation value of the securities thus works out to Rs.1505.46 crores.

The table below summarizes the calculations.

Total liquidation value of securities
(as on 31-12-2003)

($crores)(Rs.crores)
Realisable value of securities578.90
(as on 31-12-2003)
Dollar account balance475.77
(as on 31-12-2003)
Dollar equivalent31.16
(exchange rate of $6.55 to Rs.100)
Current rupee value of dollars1402.33
(exchange rate of $1 to Rs.45)
Exchange difference for dollars926.56
(1402.33 – 475.77)
Total liquidation value of securities1505.46
(578.90 + 926.56)

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