Anything for a friend: Why PM Modi owes an explanation for Adani's miraculous rise

In a recent interview with a TV news channel, Gautam Adani, the chairman of the Adani Group, spoke about the allegations of favouritism levelled against Prime Minister Narendra Modi and his party. He said: “These allegations are baseless…the fact of the matter is that my professional success is not because of any individual leader.”

Last month, while speaking to a Hindi news channel, Adani said, “...I want to tell you that you cannot take any personal help from him (Modi). You can talk to him (Modi) about policy, discuss the interests of the country, but the policy made is for everyone, not for the Adani Group alone.”

When Congress leader Rahul Gandhi raised the issue of cronyism in Parliament—remarks that were later expunged—and called the attention of the House to how the government had favoured the Adanis, the treasury benches kept interrupting him and insisted that he produce “documentary evidence”.

So, here’s a recap to shed some light on the claims and counter-claims, accusations and rebuttals made in the recent past about the meteoric rise of the Adani Group. If you knew where to look, you’d find information in the public domain that does indeed authenticate the charges and refute Adani’s claims that he was done no special favours.

Even the Comptroller and Auditor General of India (CAG) has on occasion highlighted how BJP governments have favoured the Adani Group.

Jharkhand: Energy Export to Bangladesh

During Prime Minister Narendra Modi’s first official visit to Bangladesh in June 2015, two Indian private companies, Adani Power Ltd (APL) and Reliance Power Ltd, signed separate MoUs with the Bangladesh Power Development Board (BPDB) to set up power projects in that country with a combined investment of $5.5 billion.

But on 11 August 2015, Adani Power signed an MoU with BPDB to set up a 1,600 MW coal-fired thermal power plant at a suitable location in India to supply electricity to Bangladesh.

The then BJP government in Jharkhand, acting on a request from the Adani Group, violated set norms, twisted rules and used brute force to acquire 917 acres of land in the state’s Godda district. The state government also changed its own policy that laid down that any power plant set up in the state must supply 25 per cent of the power generated to Jharkhand and allowed the Adanis to export the entire power generated to Bangladesh.

The Adanis had obtained environmental clearance to source water for the power plant from the river Chiru. But the group applied for changing the source to the river Ganga without submitting a new environmental report, and yet received the clearance.

A petition to the National Green Tribunal (NGT) by a Delhi-based activist was dismissed in July 2022 on the grounds that he was not an affected person. The NGT ruled that the petitioner should have filed the petition within 30 days of the approval.

The Union government in 2019 amended three-year-old guidelines that prohibited stand-alone power projects inside a Special Economic Zone (SEZ). But the amendment allowed the Godda power project to become India’s first standalone power project in an SEZ so that it now enjoys a zero-tax regime.

The strange deals have ensured that pollution and environmental damages will occur in Jharkhand while the Adani Group earns billions by exporting electricity to Bangladesh without paying any tax here. In another recent development, Bangladesh objected to the high cost of electricity demanded by the Adanis.

Sri Lanka: Port and Green Energy

A cabinet memorandum presented in the Sri Lankan Parliament in 2021 confirmed that the Government of India had ‘selected’ [the] Adani Group as the Indian company to develop the Eastern Container Terminal (ECT) at Colombo port.

Port workers had demanded that the ECT be developed by Sri Lanka itself or the project be handed over to the workers’ body, which was ready to invest, alleging the past human rights violations by the Adani Group.

Prasanna Kalutharage, president of the Sri Lanka Independent Ports Employees’ Association (SLIPEA), told this reporter in a recorded interview, “It is pressure from your leader Narendra Modi. Your leader wants Sri Lanka to hand over the ECT to his friend. But we won’t let our national assets go to Adani or to any other private company.”

Palitha Athukorala, president of the National Union of Seafarers Sri Lanka, also alleged, “Modi wants to promote Adani’s business interests in Sri Lanka under the cover of India’s geo-political and security interests.”

In June 2022, former head of the Ceylon Electricity Board (CEB), M.M.C. Ferdinando, claimed: “The President summoned me after a meeting and said that India’s Prime Minister Modi is pressuring him to hand over (a renewable energy project in northern Sri Lanka) to the Adani Group. I said, this matter doesn’t concern me or the Ceylon Electricity Board and this (relates to) … the Board of Investments. He insisted that I look into it.”

While his claim was widely reported in the Sri Lankan media, a few days later he ‘withdrew’ the statement, ostensibly under pressure.

Airports: From Zero to Seven

In 2006, the UPA government awarded concessions to the GMR and GVK groups to operate Delhi and Mumbai airports, respectively, for a period of 30 years. The Supreme Court upheld this privatisation on the condition that each bidder needed to partner with an experienced airport operator. Even though GMR had emerged as the top bidder in both cases, it was decided not to award both airports to the firm in the interest of competition.

In 2019, however, the rights to operate Ahmedabad, Lucknow, Mangalore, Jaipur, Guwahati and Thiruvananthapuram airports were awarded to the Adani Group, which had zero experience in operating airports, for 50 years.

In December 2018, a Niti Aayog memo had argued that ‘a bidder lacking sufficient technical capacity’ could ‘jeopardise the project and compromise the quality of services the government is committed to provide’. The PPP cell of the DEA flagged that airport development projects were ‘highly capital intensive’, and involved high financial risks.

Handing over six airports to a single bidder was not advisable, the note said. The DEA note added that in case there was a ‘project failure’, there would be other capable bidders available to take on the failed projects if more bidders were allowed to operate airports.

The PMO and the Niti Aayog chairman, who headed the Empowered Group of Secretaries, however, overruled the warnings, facilitating a clean sweep of six airports by the inexperienced Adani Group. Objections from the Department of Economic Affairs and Niti Aayog that on account of the high risk in such enterprises, the earlier norm of not allowing more than two airports to a single bidder be followed were brushed aside.

In less than 24 months, the Adanis had graduated from operating a private airstrip in Mundra to being a leading player in the airport sector.

The Niti Aayog, in its assessment had agreed with many of the suggestions made by the DEA. Its note read: ‘While it is important to enlarge the spectrum of bidders through the inclusion of players from other sectors, it is also important to ensure that the quality of experience is suitable to the technical capabilities required for undertaking (the) proposed projects.’

It had also objected to the fee the operator was to pay the Airports Authority of India (AAI) on the basis of ‘per passenger’:

‘It needs to be noted that the actual payment received by the authority shall be determined by the actual passenger volume every month/year… during periods of low passenger volume, the receipts shall be adversely impacted. From the concessionaire’s perspective, on the other hand, passenger volume shall only impact part of his revenues and in a scenario where passenger volume for particular periods are low but… other aeronautical revenues are high, the authority shall lose out on the portion of non-passenger related revenues.’

None of the recommendations made by either the DEA or the Niti Aayog were included in the bid documents. Is more proof needed to show how the Group was favoured?

Mundra: Penalty Waived

The Adani Ports and SEZ Ltd’s waterfront development project at Mundra in Kutch, Gujarat was fined Rs 200 crore or one per cent of the project cost (whichever was higher) by the environment ministry in 2013 for damaging the environment and violating laws. However, in 2015, the environment ministry did a U-turn and ordered studies to estimate the cost of damage.

The company, the ministry ruled, would pay for fixing the damages once studies concluded; the violations would be dealt with separately, it said. The UPA government had mandated that the company should create a fund with Rs 200 crore imposed as penalty.

But in 2017, the Modi government accepted APSEZ’s contention that the company did not violate any law and no environmental damage was done. The Rs 200 crore penalty was thus waived.