Adani accused of yet another scamPublished by MAC on 2018-03-16
Source: The Caravan
Is there no end to the profiteering - and tax evading - manoevres of India's most powerful private coal mining outfit?
Here's the latest revelation of yet another Adani scam, valued at millions of dollars (See also: Is this the end of Adani's mega Australian project? )
Coalgate - mark 2
The Adani Group reaps benefits worth thousands of crores of rupees as the
coal scam continues under the Modi government
By Nileena MS
1 March 2018
Parsa East and Kanta Basan, a coal block in Chhattisgarh, is allotted to
Rajasthan Rajya Vidyut Utpadan Nigam Limited (TTVUNL). It is being managed
by a joint venture between RRVUNL and Adani Enterprises Limited, and AEL
also runs mining operations at the block.
WHEN THE SUPREME COURT, in a landmark decision in September 2014,
cancelled nearly all existing permissions for the captive mining of coal
blocks, it was seen as having halted the “Coalgate” scam.
State-owned enterprises and private companies across the country were compelled to
dissolve partnerships that most often favoured the corporate purse over
the public good. Those state-owned enterprises that subsequently reapplied
for permissions had to operate under a new law that restricted private
firms to the role of contractors. None were allowed to carry on with
things the way they were — with just a single exception.
The partnership between the Rajasthan Rajya Vidyut Utpadan Nigam Limited,
a power corporation of the Rajasthan government, and Adani Enterprises
Limited, the flagship company of the Adani Group, continues on the basis
of agreements that pre-date the Supreme Court ruling.
In Chhattisgarh, a joint venture formed by the two entities in 2007 is
exploiting a captive coal block called Parsa East and Kanta Basan. The
terms of the joint venture give the Adani Group effective control over it.
Numerous other arrangements regarding the block also violate the 2014
ruling, as well as later laws and guidelines, and this state of affairs is
clearly laid out in company documents and regulatory filings.
Yet, despite the clear breach of law and contempt for the Supreme Court
decision, there has been no action or complaint against these arrangements
from either the Rajasthan and Chhattisgarh governments, both headed by
chief ministers from the Bharatiya Janata Party, or the central
government, headed by Prime Minister Narendra Modi.
RRVUNL pays the joint venture for coal from Parsa East and Kanta Basan.
The pricing calculations involved in this are not normally published, but
RRVUNL has disclosed pricing breakdowns from 2016.
Based on the figures in these and production numbers reported by Adani
Enterprises Limited, even the lowest possible estimates calculated by The
Caravan show that RRVUNL will pay the joint venture at least Rs 6,000
crore — approaching $1 billion at present rates — in excess of prevailing coal
prices over the 30 years that it has rights over the coal block.
To add to this, arrangements for a power plant to be run at the block by
the Adani Group promise the conglomerate a rock-bottom benefit on fuel of
Rs 1,000 crore over the same period. By anything but the most conservative
estimates, these sums are likely to be far higher.
Nileena MS is the fact checker at The Caravan.