“Unscrutinized renewal of opaque IPPs’ “contrats en beton” would be equivalent to at least 10 Illovo deals”

Interview: Nita Deerpalsing

* ‘Corruption which enables policy capture is the core script of the movie we keep watching over and over again’

* ‘We are sowing the seeds for a fragmented Mauritius….
…those who have been able to afford primary private education and those who have not’ 

Recent financial scandals in Mauritius, including the arrest of a former Finance Minister, raise concerns about systemic corruption beyond isolated incidents. The following interview features Nita Deerpalsing, who argues these are symptoms of deep-rooted issues stemming from the influence of powerful economic interests since independence. The conversation also explores this historical context, the impact of a rent-seeking economic model, and specific examples like IPP contracts and the Freedom of Information Act. Nita Deerpalsing also argues in favour of a genuine “rupture” through bold anti-corruption measures and fundamental shifts for Mauritius’ democratic and economic recovery.

Mauritius Times: The headlines in recent weeks have been dominated by the Financial Crimes Commission’s investigations into alleged fraud, abuse of position, money-laundering, and other offenses in different institutions/companies. The latest development involves the arrest, detention, and subsequent parole of former Finance Minister Renganaden Padayachy in connection with the so-called ‘Apavou Deal’. While the presumption of innocence must be upheld for all individuals under investigation, these repeated scandals raise troubling questions. Is this really just the work of a few bad apples, or are we looking at something far more systemic, deeply rooted in the structures of power and governance?

Nita Deerpalsing: It goes without saying that those who have siphoned funds from the public purse must face the consequences of their actions. What we are seeing these days is an escalation of both the number of cases as well as the huge amount of funds which were diverted from being used to enhance the well-being of each citizen of the country.

However, to your question as to whether these are just a few bad apples, I would say that we are seeing the symptoms of a very deep-rooted issue. It is therefore systemic and until we address the underlying systemic architecture, we will keep having this movie of symptoms parading in front of us.

I need to take you back to 1968 at the time of our independence so that we can zoom in on the systemic architecture. Let us look at some undisputable facts:

We obtained our independence after a general election whereby the sugar barons poured enormous funds to finance an outright racist, fear mongering campaign which led to 44% of the population voting against independence. The scourge of political financing starts right there. Because it was financing by the sugar barons to keep a certain dominance over the economic life of this country. That was the real objective. The diversion for the people was in fuelling an outright racist campaign which succeeded in marking a deep ridge in our national psyche.

The deep scars of that shamelessly racist campaign, financed by the sugar barons are still with us. It not only resulted in the core of the Creole intelligentsia to flee to Australia, thereby carving out an important part of our talent pool, but it also created the divide between Hindus and Muslims on the one hand and Creoles on the other hand. The very root of that psychological divide lies there in that deliberately racist, divisive campaign funded by the sugar barons. This is why it is laughable when some people today have the guts to say that if we criticize the historical dominance of the sugar barons, lo and behold, “we” are now the racists! And yet every 1st February, we are reminded that a people which does not know its History is a people without rudders.

So, after independence, Sir Seewoosagur Ramgoolam (SSR) was practically hostage to the sugar barons to make something of this country. The country was poor, most of the population lacked formal education and there was no existing public architecture on which SSR could rely. This is why what he went on to do is tremendously remarkable. While navigating with the dominance of the sugar barons, he put into place a solid welfare state for the people to access health and education. Let us remember that no country in the world, no corporation, no enterprise, no family unit can even dream of prosperity and well-being without these two essential ingredients: a healthy and an educated population.

* Given this dependence on the sugar barons, how then was SSR able to implement such significant social reforms?

SSR’s government achieved this by negotiating and securing a guaranteed market and price for our sugar exports. While this provided a comfortable existence for the sugar barons, it also enabled SSR to establish his vision for a healthy and educated population. His previous membership of the Fabian Society surely had something to do with this enlightened vision.

Now do you realize that for all these years of a guaranteed market of 500,000 tons of sugar exports at a guaranteed price, the sugar barons in Mauritius have never ever declared a profit?! This was the birth of the systemic economic architecture of this country: a rent-seeking model.

And let us be clear: a rent-seeking model is inherently “dominere” and is absolutely against the larger well-being of the majority of the people. Because it siphons public funds for the private interests of an oligarchy.

En passant, remember that the MMM of the 1970s decried the “dominere”; of the so-called “14 familles”. But after 1982, the narrative of the “14 familles” gradually disappeared from the vocabulary of the MMM.

Clearly, if not some pockets, at least many minds were captured to turn the narrative from a “dominere” to “pa kapav ena developma sans zot” (there cannot be development without them). A narrative which embeds a sense of superiority/inferiority. Thus emerged the TINA (There Is No Alternative) paradigm which even today is furthered and entrenched by some people who have interiorized a deep inferiority complex. Or are so poor in character that their motivation for public action stems from the thickness of envelopes that the sugar barons can still afford to throw around.

While the perilous context in which SSR became Prime Minister was very particular and there was truly no alternative then, we have to deplore that successive political leaders have so far failed to un-scotch themselves from the TINA paradigm. Is it because they have some inferiority complex which they cannot surmount? Or is it because the erstwhile sugar barons are still very cunningly watering the coffers of political parties so that public policy is captured to further their narrow interests?

Is it because political leaders post SSR are devoid of courage and vision? Or is it because it is much more comfortable to not rock the boat, and glide comfortably on TINA waters flowing on the solid bedrock of a rent-seeking model which is only entrenched regime after regime?

* Let’s see what’s happening today. The government appears to have deliberately maintained a distance from the FCC’s investigations, allowing the institution to carry out its mandate without overt interference. But if we’re now confronting what looks increasingly like systemic corruption, the Alliance du Changement’s promise of a “rupture” carries even greater responsibility. After all, previous anti-corruption efforts have largely fallen short of expectations. What concrete, bold measures should the government implement to confront corruption head-on and deliver the genuine break from the past?

Let us not wear blinkers. Gliding comfortably on TINA waters is definitely not “rupture” and will never be, no matter how much we use the word as a cliché in an electoral campaign. “Rupture” is certainly not failing to see through cunning fear-mongering which leads to making important public policy decisions in craftily created panic mode – like the one on the cards today regarding the upcoming renewal of the Independent Power Producer (IPP) “contrats en beton” (rock-solid contracts).

Sitting comfortably on the bedrock of a rent-seeking model which is only being further entrenched election after election, will give rise to exactly the symptoms that we are seeing today.

Because the wheels of this rent-seeking model, which is inherently “dominere”, and inherently against the larger wellbeing of the people, can only keep moving smoothly every 5 years with the help of a much-needed oil: corruption from a willing corruptor whose benefits will greatly accrue by throwing a few peanuts here and there. In fact, the problem with the rent seeking model is that it has now trickled down to a new bourgeoisie class and beyond. Thereby entrenching the notion that rewards need not align with level of risks taken. Provided that there’s a ‘contribution’ for electoral campaigns. This now widespread rent seeking model is the systemic faultline which will ensure the cyclical parade at the FCC.

Corruption which enables policy capture is the core script of the movie we keep watching over and over again. Until those who run for elections and are voted into office, are not animated by genuine, noble political convictions, they will not see nor will want to see this stark reality. As long as we have career-politicians devoid of any political conscience; who only care for the spoils of power, this systemic economic architecture will generate exactly the same results. Admittedly to varying degrees.

I am convinced that SSR, as leader of the Labour Party, carried deeply in his consciousness the very reason for which the Labour Party was needed in 1936: to fight for the dignity of the people and to oppose the “dominant-dominé” model of the day. Influenced by Fabian philosophy, he was navigating through the infested waters of the sugar barons. But he stood for the noble idea of working for the wellbeing of the population at large. Which is why he ensured that there would be a welfare state for the many, not a welfare state for the economically dominant segment of our country.

I sometimes ask myself who today in the Labour Party is even cognizant of the fact that being entrusted with the power of the people is first and foremost about opposing this “dominant-dominé” model? I have to say that in 2007 when Dr Navin Ramgoolam led the battle against the sugar barons, he demonstrated that he was truly animated by those convictions. Convictions that would make the 1936 Labour Party founders proud.

I hope these convictions still stand steady today. Let’s see what happens to the IPP contracts.

* Consistent with the idea of “rupture,” one would expect the government to drop any resistance to a Freedom/Right to Information Act, which is essential for improving public oversight of public finances, especially considering the Director of Audit’s recurring reports of irregularities, and also regarding procurement in the public and parastatal sectors, as well as assistance to corporates. What do you think?

I think the IPP contracts will provide a good litmus test on freedom of information.

Three “Independent” power producers (IPP) have their contrats-en-beton coming to an end soon. They are of course asking for a renewal. Will the population finally get to know that the guaranteed price is indexed on exchange rates, on price index not only in Mauritius but also on EU price index for raw materials? Does that remind you of sugar barons days?

Will the population get to see in full transparency how exactly the price that is being paid for each KwH to the IPPs is a case of abusive profits in a captive market and therefore results in a “prix-dominere” for each and every citizen of this country?

* Given your understanding of how the IPP model has evolved over the past three decades — its impacts, perceived imbalances, and critiques that it has served private interests at public expense — why is this renegotiation so important? And what broader structural reforms do you believe are needed to address the underlying issues?

First, I think we have to ask ourselves whether a good portion of electricity production should even be privatized. If the public purse can afford to spend 19 billion on Safe City cameras, 12 billion on a partial tramway, should it not invest in electricity production so as to ensure that accessibility to electricity is never ever compromised by threats and blackmail of supposedly “too-big-to-fail” private corporations in search of narrow interests?

Do you know that one of these very “patriotic” companies threatened to go off the grid in 2024 if the public officials did not meekly acquiesce to their demands? What exactly is the meaning of long-term public interests?

To me it is incredible that today in 2025 we are still with the idea of keeping such a strategic sector as electricity production in the hands of the erstwhile sugar barons who have sailed comfortably from guaranteed-market, guaranteed-price sugar production, to tourism with all-inclusive packages and a supportive monetary policy, not to mention a collaborative national airline, to huge windfall gains on the ‘betonaz’ via smart cities.

* Could you elaborate on the concept of rent-seeking within the economic framework of Mauritius?

Let us travel back a century or so and imagine you are taking a leisurely walk in the countryside and you find some large expanse of land. You decide to take possession of this land. You invest in building a nice cottage — so we recognize that you have made some investments – then you ask that public money is used to market your cottage overseas.

Then when people flock to your cottage for holidays, you of course charge them a rental fee. But all this rent that you pocket, derived from a land that you did not even buy in the first place (or paid pittance for), you now keep for yourself. Not even in rupees but in forex overseas!

Would you want me to call you a great, innovative, enterprising, risk-taking industry captain without whose existence I would not survive? Maybe you would even expect me to give you a medal on the 12th of March for your “contribution” to the country?

It may be good to know that according to publicly available reports from the Truth and Justice Commission, a good portion of land were “acquired” in controversial circumstances. And speaking of Freedom of Information, let us hope that all the reports, without exception, of the Truth and Justice commission will soon be in the public domain.

* What about the IPPs?

We all know that profits should be aligned with level of risks any entrepreneur takes. Do you know that most of the bank loans to finance the installation of machinery was guaranteed by the public? And that these loans were mostly paid off by the public too?

We know that IPPs are inextricably linked to sugar refineries. Do you know that the Mauritius Sugar Syndicate (MSS) buys refined sugar from the sugar producers not on the actual amount of refined sugar it buys but it pays an amount calculated on the refinery capacity of the sugar refineries, regardless of whether the refinery has operated at full capacity or not? Do you know that maintenance and repairs are borne by the MSS? Including the wages of the workers? Note that MSS funds include money from small planters. Which means the small planters are footing a lopsided share of expenses.

Still on freedom of information, it is incredible how opaque some decisions are with respect to small planters. If the sugar refinery tells the small planter that the sugar content of the sugarcane, he delivered is 60%, then that’s what it is. There is no way to verify that claim, there is no transparency. 25 years ago, small planters used to pay 24 out of every 100 kg of sugar in lieu of payment for the sugar mill’s crushing and extraction. Today, after so-called efficiency gains (which required public funds!), the small planter is paying 22 kg out of every 100 kg. It seems that efficiency gains is only for the mills, not for the small planters.

I am told that all decisions at MSS are completely opaque as far as small planters are concerned. The small planters are not privy to any details about negotiations regarding prices obtained. Apparently when questioned, one former CEO of MSS unabashedly stated that this was a trade secret that could not be given out to any Tom Dick and Harry – meaning the small planters.

Do you also know that the MSS deducts from the small planters Rs 3,000 per arpent for irrigation whether their plots are irrigated or not. Also to be noted is that any increase in this fee for irrigation is unilateral, without any consultation with the small planter community. Allow me a side comment on water rights. Do you know that some sugar barons are trying to capture “ownership” of water rights? This needs to be watched carefully because it will be scandalous if that were to happen.

Are you aware that small planters get peanuts for the bagasse they deliver to the IPPs? Not to mention the pithy Rs 3,000 per ton for molasses when this should be closer to Rs 8,000 per ton in order to be considered fair pricing?

All in all, some small planters claim that they are being deprived of about 50% of what is really due to them. And this is not even counting the fact that each Mauritian citizen – which includes small planters – are paying 3 or 4 times more for their CEB bill than what a fair and reasonable pricing from the IPPs should have been.

Anyone with even an iota of comprehension of what “justice” means would argue that the IPP contracts which are coming to an end cannot and should not be meekly renewed for another 30 years on the same basis.

* With time running out and the contracts nearing their renewal, will it be possible to scrutinize and review these agreements thoroughly before any renewal decisions are made in good time?

Omnicane’s current contract is only coming to an end in 2027. That is 2 full years from now. You will tell me that this is not enough time to prepare another kind of energy policy? Unless you tell me that Omnicane has at least 2 very influential porte- paroles of the same patronym in decision making spheres these days, then I will understand that 2 years are not enough indeed.

The facts are there. Should these IPPs “contrats en beton” be meekly renewed, without scrutiny about price structure, without getting out of the opacity of the price structure, without any questioning of the mark-ups which are in no way aligned with the level of risks taken, then this will be equivalent to at least 10 Illovo deals at one go. There are enough Chartered Financial Analysts around to calculate the NPV (net present value of future profits vs investments and risks).

For those who don’t recall what the Illovo deal was, let us remind them that in 2005, the Labour Party campaigned forcefully against this deal which entailed huge windfall gains to sugar barons on conversion of prime agricultural land. Which the State Law Office (SLO) did not approve. And yes, let us also not forget that that was the first time in Mauritius History, that the SLO was brushed aside to bring in a private lawyer to give the OK for the deal.

Factually, Paul Berenger was the then Prime Minister of the MSM-MMM team. Bifurcating SLO advice in favour of private legal advice: does that remind you of something? Let us not forget when that “idea” was implemented in the first place.

* You’ve also raised concerns about the slow pace of the energy transition, particularly around the use of biomass and the proposed shift from coal to wood chips. What are your main reservations – economic, environmental, or strategic – about the current approach to renewable energy in Mauritius?

Don’t you think calling woodchips “biomass” is laughable to start with? Woodchips come from deforestation. Period. Under what concept can woodchips be considered sustainable? On top of it, the import of woodchips will likely be more expensive which means more forex out of the country.

We should be maximizing to the last inch, any space available for solar panels for electricity production. Admittedly it will be only a fraction of our energy needs, but still it will contribute to lower the dependency on non-renewable sources. Additionally, with current technological advances, we should revisit Waste to Energy projects; the more so in the light of what we see at Mare Chicose.

* What is your reaction to Navin Ramgoolam’s statements about a democratic and economic recovery (‘redressement démocratique et économique’)? What fundamental shifts do you believe are necessary to facilitate that recovery?

We will have to deal with the impacts of the current disruption in international trade. However, with every challenge comes an opportunity. I believe that the African continent should unite in accelerating the implementation of the AfCTA – the African continental free trade agreement.

‘Redressement économique’ is also about the two essential ingredients that SSR saw as the foundation of a prosperous country: a healthy population and an educated population.

Both on health and education, I believe we have to grapple with the fact that our population is not enjoying good health. And it is not the construction of luxurious clinics that will make a dent in the inherent ill health of the majority of the population. I am convinced that the huge amount of Ultra Processed Food (UPFs) we consume has something to do with it.

But do we have a consumer protection body which can force supermarkets to place all UPFs and junk food in the back corner of the supermarkets? Can we heavily tax these UPFs? But then can we ensure the population affordable access to wholesome food? Are we going to continue to support the consumption of fake UHT milk in cartons rather than give a boost to local fresh milk production?

As for education, I wonder if anyone is taking cognizance of the fact that privatized primary education is chopping away any dream of nation building. The organic bonds shared by children at an early age growing up together in public primary schools with a common sense of citizenship can never be cultivated outside of these formative years where children are united by one national curriculum. It is very sad to see that the middle class is fleeing from public primary schools. Parents rightly want the best for their children. This means that the whole chunk of the middle class does not feel their children will get the best education in public primary schools.

Other than the quality of education, my concern is that we are sowing the seeds for a fragmented Mauritius. Those who have been able to afford primary private education and those who have not. How can we ever dream of a population united by a common sense of public goods, a common sense of purpose when the system is automatically forcing segregation in the notion of public goods, therefore shared citizenship right at the primary school level?

* At the end of the day, why is it that those in power often fail to act in the public interest, allowing vested interests to influence policymaking – whether in areas like the IPP contracts or Freedom of Information legislation? Reforming the former would clearly benefit consumers, while the latter would help bring transparency to critical decisions involving public finances, procurement, and more. What, in your view, explains this persistent disconnect between public interest and political action?

I guess there must be many reasons for some people just wanting power just for the sake of power and not for the responsibility that power entails. Sadly, they are damaged souls. But damaged souls are nefarious for the construction of sustainable public goods.

But here again education – within the home or at school – can be of help. I believe most human beings do value empathy and the need for one’s consciousness to evolve. This is why spirituality and religion have such a central place in the human species. In the spiritual philosophy within which I was brought up, there is a 3D formula which is supposed to be forge one’s character: Dayaa (compassion/empathy), Daama (self-control/staying away from extremes) and Daan (the concept of charity/of giving). This is from the Upanishads, but it actually cuts across and is present in all spiritual teachings. For a country with so much public display of religiosity, I am baffled as to why this 3D formula seems to escape so many people.

I would be for each child starting their day in school with 3 minutes of deep breathing exercises whereby they are encouraged to silently contemplate these notions according to their respective faith. It would be a great bonus if every adult could be nudged to do the same.

* To effect meaningful change, one often needs to be in the ‘right’ political party. In your view, is this a difficult choice to make because of a scarcity – whether of viable alternatives, genuine political will, or principled leadership?

When I see the (lack of) character of some individuals who today are parading as inheritor-in-waiting while touring the oligarch’s boardrooms to announce that they are the “héritier-par-défaut” of the Labour Party, I can only shake my head in contempt.

Because it is now evident that under an artificial veneer, there is not even a faint whisper of genuine Labour convictions in their actions. Unless you tell me that what is called Labour convictions in 2025 is about cosying up to the oligarchy, hinting that as supposed inheritor-in-waiting, future policy capture with the appropriate envelopes will be implemented by you. Not to mention cowardly orchestrating and pulling strings behind cheap casteist campaigns that would make the 1936 Labour Party founders blush in shame.

Mauritius Times ePaper Friday 18 April 2025