Modani Files: How Adani is unearthing India’s buried sunshine
Adani’s businesses accounted for 25 per cent of India’s coal imports this fiscal
The signs of how India bleeds to nourish Adani’s ever-growing business empire are visible in one way or the other. Last year, it was when the union Coal Ministry, claiming that the domestic coal stock was not enough to meet the country’s power demand, asked State governments and power-generating companies to import coal. And, no prizes for guessing. Adani’s businesses accounted for 25 per cent of India’s coal imports this fiscal.
The credit for Adani’s growth as one of the world’s largest private developers of coal power plants and coal mines, like in all the growth stories of his multi-business empire, goes to the Narendra Modi government. How the ruling political party of India kept bending in favour of coal, called the dirty fuel by everyone except Modi and Adani, is evident when one looks at how captive coal blocks in the country’s mines were handed over to Adani violating the directives laid out in the Supreme Court Decision of 2014.
From 1993 to 2011, different governments allotted 218 captive coal blocks to individual private and State-owned entities. However, in 2012, the Comptroller and Auditor General (CAG) of India found the allotments to be arbitrarily causing a huge loss of revenue. In response to a public interest litigation, the Supreme Court in September 2014, too, found all the allotments of coal blocks to have been illegal, barring just four that were being run by the Central government without any private partners. The court noted a pattern of State-owned enterprises granting lucrative contracts to private firms to mine and deliver coal from their blocks.
The Adani Group held five such contracts by 2014. The manner in which contracts were given away came to be known as Coalgate, which interestingly, was a major talk point for the Bharatiya Janata Party and Modi in the 2014 elections. When they came to power, a new law i.e., the Coal Mines (Special Provisions) Act, 2015, was brought. This had a window of discretion kept in the regulations and as per Section 11(1), which allowed State governments that were freshly allotted mines, to continue the Mine Development and Operation (MDO) contracts that the previous owner of their mines had before the court cancelled them. They didn’t have to go for fresh auctions.
Using this provision, the BJP government in Rajasthan reinstated Adani Group companies as MDOs for two mines. This was clearly against the decision of the highest court and the arrangement gave Adani a 74 per cent holding in the joint venture.
After Adani benefitted from that purposefully created loophole, in 2020, the PMO suddenly woke up and felt that the practice of MDO appointment lacks “consistency and transparency” for which it will “continue to be questioned in the public domain”. The NITI Aayog and the Ministries of Coal, Finance, Mines and Steel agreed with the PMO and decided that no such contracts would be allowed in the future. In short, the window was created for Adani, and after he benefitted, it was decided to close it.
(To be continued tomorrow)
