Extract from March Cover Story: The Massive Indebtedness of the Adani Group and Its Convenient Relations with Government Enterprises

15 March 2018
At Mundra, the Adani Group received more than 5,500 hectares of additional land in the first years of Modi’s term as the chief minister of Gujarat, and added a special economic zone to its port facilities at the site.
amit dave / reuters
At Mundra, the Adani Group received more than 5,500 hectares of additional land in the first years of Modi’s term as the chief minister of Gujarat, and added a special economic zone to its port facilities at the site.
amit dave / reuters

In the cover story of The Caravan’s March 2018 issue, “Coalgate 2.0,” Nileena MS reports that a joint venture of the Adani Group and a Rajasthan power corporation that is currently exploiting a captive coal block in Chhattisgarh is in clear contempt of the Supreme Court’s landmark 2014 ruling regarding the “Coalgate” scam and in breach of later laws, yet has faced no action under the Modi government. The Supreme Court had declared illegal 214 coal-block allocations, and noted a pattern of state-owned enterprises granting lucrative contracts to private firms to mine and deliver coal from their blocks. This compelled parties involved in exploiting the blocks to reapply for permissions and renegotiate all mining agreements under stringent new rules—and yet the joint venture continues to operate on the terms of a pre-2014 agreement, which gives the Adani Group control over it. Public documents show that existing arrangements promise the joint venture undue gains of at least Rs 6,000 crore. In addition, the Adani Group will receive an estimated rock-bottom benefit of Rs 1,000 crore through arrangements for a power plant that it is to run at the coal block. Nileena writes, “By anything but the most conservative estimates, these sums are likely to be far higher.”

In the following excerpt from the story, Nileena traces the history of the Adani Group’s legal troubles, and the conglomerate’s beneficial relations with state and central governments across party lines. She writes that it has benefitted greatly from investments by government-owned enterprises that have helped “shore up the finances of the Adani Group at a time when the conglomerate is massively indebted—as it has been for much of its history.”

The Adani Group has a history of highly favourable treatment by governments from across the party spectrum. It also has a long record of partnerships with state-owned enterprises that have proven detrimental to public interests but very advantageous to the conglomerate.

Nileena MS is a staff writer at The Caravan. She can be reached at nileenams@protonmail.com.

Keywords: CAG BJP Narendra Modi Gujarat Adani Group Gautam Adani
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