The Formula E race, which has emerged as the new battleground between the ruling Congress and the Bharat Rashtra Samithi (BRS) in Telangana, may very well end up becoming the first case which the Congress files against BRS working president KT Rama Rao (KTR).
In the past month alone, the Congress has cancelled the Formula E event, issued a show cause notice to former Municipal Administration and Urban Development (MAUD) Chief Secretary Arvind Kumar, and slammed the BRS for promoting Formula E’s event in the first place. There are two main allegations the Congress government has put forth. Why did the BRS government pay Rs 55 crore to Formula E? Why did they not act against the event’s promoter, Ace Nxt Gen, a subsidiary of the well-known Greenko group, despite the company defaulting on payment and backtracking on conducting the next season?
The Formula E race was brought to Hyderabad by KTR along with IAS officials like Arvind Kumar and Principal Secretary of IT and Industries Jayesh Ranjan last year. The first race in Hyderabad happened as part of Season 9 in February 2023.
The show cause memo to Arvind Kumar also questioned the BRS government’s last minute decision to make the Hyderabad Metropolitan Development Authority (HMDA), the city’s nodal urban planning agency, the promoter for the Formula E event.
In his reply to the government on January 24, 2023, Arvind Kumar mentioned twice that KTR , who was the then Municipal Administration minister, was kept in the loop at every step. Arvind stated that Ace Nxt Gen did not make the returns they expected and backed out only when Season 10 was about to commence.
“The then Promoter (Ace Nxt) has not cancelled his part of the contract officially till date. However, as understood, considering the net direct returns not in accordance with the Promoter’s expectations or what he had invested, they had not come forth till the time the agreement for Season 10 was to be confirmed and first instalment of fees paid by June 2023,” Arvind said.
According to Arvind, considering the time crunch, KTR directed the Municipal Administration Department to go ahead with Season 10 despite the lack of an alternative promoter. By September 2023, KTR had decided that HMDA would step in. The Telangana government ended up paying half the licensing fee of up to approximately Rs 50 crore to Formula E for conducting the race.
Explaining the decision, a source from the BRS told TNM that the BRS government’s decision to step in and take on the role of a promoter stemmed from wanting to shape Hyderabad’s cultural capital and branding. “It was understood that even with the promoter’s involvement, it would be a loss-making venture for everyone, including the state government. Some events are for brand building and the government cannot look at revenue initially. However, the extent of the loss was not anticipated by Ace Nxt Gen, hence they backed off,” the source said.
Responding to the Congress’ query about why action was not taken against Ace Nxt Gen, Arvind Kumar replied that there was still time left and the state government can still hold the company accountable. A source in the BRS party who TNM spoke to alleged that the Congress has forced Arvind to pass the blame on to KTR, thereby enabling them to levy false allegations of corruption against the BRS.
However, in stark contrast to the BRS’ approach, the Congress has argued that branding cannot take precedence over public benefit. A source close to Telangana Chief Minister Revanth Reddy also justified the decision not to pursue Formula E by stating that very little revenue was generated from the event and it didn’t have any public benefit component whatsoever.
Last month, Deputy CM Mallu Bhatti Vikaramarka said that the Congress government would explore legal action against the tripartite agreement between MAUD, Formula E, and Ace Nxt Gen as it was executed in violation of Secretariat business rules.
“These agreements offer no benefits to the people and undertaking it makes no sense,” Bhatti said, pinning the blame on KTR for bringing the race to Hyderabad.
The current allegations made against the BRS are not unlike those made against former Andhra Pradesh CM Chandrababu Naidu in September 2023. The AP Crime Investigation Department (CID) had argued that Naidu misled his cabinet by using the word ‘grant-in-aid’ in the GO, implying that Siemens and Design Tech, two private companies, would be paying for the Andhra Pradesh Skill Development Corporation project. Naidu was also accused of rushing the project through.
The allegations in both cases hint at how the leaders rushed and poured money into the concerned project while the state was led to believe that an independent group would pay a part of the finances.