Fadnavis backstabs Adani over Dharavi project after allegations by Hindenburg?

Adani infrastructure, the construction arm of Gautam Adani's group of companies, had been accorded  the bid for the redevelopment of Dharavi, Asia's largest slum, in November last year despite the fact that Seclink Technology Corporation (STC), a UAE-based firm, had far outbid Adani Infrastructure and Developers Private Limited. STC offered Rs 7,200 crore against Adani Infrastructure’s Rs 4,539 crore bid.

Reports published by Hindenburg two months later on January 24 this year, claimed that key listed Adani companies had taken on substantial debt, putting the entire group on a precarious financial footing. As the report triggered a crash in Adani stocks, the group scrambled to cut its debts and win back the confidence of investors.

Following this report, Maharashtra Congress MLA Varsha Gaikwad, whose constituency includes Dharavi, raised concerns about the project in the wake of allegations of stock manipulation against the Adani group in the report  of Hindenburg.

Replying to Gaikawad, Deputy CM Devendra Fadnavis has now said there was no need to speculate about the project and the government would ensure it was completed. He told the Assembly that whatever the situation, the government will ensure that hindrances do not come in the way and the project is completed. “There is no need to speculate about the project. The Letter of Intent will be awarded only if tender conditions are completed. The government does not look at the person but it looks at whether the rules are fulfilled,” he added.

Fadnavis said that the Dharavi tender was awarded after global bids were invited. “The tender was awarded transparently after inviting global bids,” he said. The project is to be completed in seven years , he informed the Assembly.

Fadnavis said that the Letter of Intent (LoI) for the project had not yet been issued because it could only be done after all the government departments had taken their decisions. “One decision of the urban development department is awaited. Once that is done, the LoI will be issued,” he said. Fadnavis said tender conditions were designed to ensure that the company was financially viable before the LoI could be issued. “The tender conditions say there has to be an upfront payment and bank guarantees. Only if these are fulfilled, the LoI is issued,” said Fadnavis. This is done to check if banks are willing to lend money to the company concerned and the project can be implemented, he said.

In light of the financial troubles being faced by Adani and banks' reluctance to lend further, it is not certain if fresh bids will be called or if Adani Infrastructure can get back on its feet.