When a state-owned electricity board failed to make headway on a large new coal-fired power plant in central India, the government decided that Adani should bring the project to completion. Since 2010, the company has acquired the land and carried out preparatory works. However, the treatment of local people affected by the project has led to accusations of bullying and crony capitalism. At the height of protests against the proposed power station and an associated dam in 2011 and 2015, some of the leaders of the protest movement were bashed by assailants described as 'company goons'. In this story, Soumik Dutta describes the controversies associated with Adani’s Pench power project in the Indian state of Madhya Pradesh.
Genesis of the project
Back in 1987, the Madhya Pradesh Electricity Board (MPEB) acquired land from local farmers to build a coal-fired power plant at Chhindwara. It promised to complete the project in three years and to provide government jobs and subsidised power to affected families. After 23 years, the MPEB failed to build the power plant, nor did the government take possession of the acquired land, which continued to be tilled by farmers. Thus, no jobs or subsidised electricity were provided, only compensation for loss of land. The level of compensation is in dispute, with farmer advocates saying most recipients received a paltry of Rs1500 to Rs10,000 (AUD $200) per acre paid by government while Adani has claimed that they received up to Rs100,000 (AUD $2000) per acre.
A questionnaire seeking clarity on the vexed issue of compensation, sent to the District Collector of Chhindwara, Mr Saurabh Kumar Suman, at his official email and repeated phone calls to his office went unanswered.
In 2010, the Madhya Pradesh government decided to bring in a private developer to kick-start the languishing project. The acquired land was sold to the Adani group at a whopping Rs13.50 lakhs ($24,000) per acre, without any fresh public hearings. The government of Madhya Pradesh had profited enormously at the expense of the farmers from whom it had acquired the land at much cheaper rates.
‘This process defies a Supreme Court of India’s ruling which states that land acquired for a public purpose cannot be sold to private entities by any government for making profit’, said Aradhana Bhargav, an advocate and the vice president of Kisan Sangharsha Samiti (KSS), Chhindwara, the community group spearheading opposition to the project.
Bhargav said the District Magistrate Saurabh Kumar had verbally admitted the above figure at the time she and a colleague had met him at his office, to submit a memorandum after they were discharged from hospital following the brutal attack on them in 2015 (see below). She said that there are no documents available in the public domain pertaining to the transaction. Even Right-to-Information queries were not answered, Bhargav added.
The proposed project has affected about three thousand farmers from twelve adjoining villages who have lost their land. A major river-diversion project associated with the power scheme has affected another 31 villages, with six of them having been fully submerged by the dam, completed in 2016.
The KSS says that Adani has built a wall around the project site, along with some site offices, but that little other work associated with the Pench power station has been completed. This lack of substantive project activity is corroborated by a report by the Global Energy Monitor,stating that, as of June 2019, no signs of serious construction activity could be seen at the project site.
Adani has established a subsidiary, Pench Thermal Energy (MP) Limited (formerly Adani Pench Power Limited), to establish its proposed power station near Chhindwara. The power station will consist of two 660-MW units, using ‘super critical technology’.
In May 2020, as India was reeling under lockdown due to the COVID-19 pandemic, the company signed a 25-year power-purchase agreement with Madhya Pradesh Power Management Company (MPPMCL) for procurement of electricity from the power station. It was reported that the agreement sets a price of Rs 4.79/unit (Rs 2.90/unit as fixed charge and Rs 1.89/unit variable charge) and that the coal is to be sourced from India’s western coalfields. Earlier reports said that the coal would be imported.
Litigation and human-rights violations
Adani acquired the land from the Madhya Pradesh Electricity Board in 2010. It was subsequently claimed that the company had started work without an environmental clearance, a claim rejected by Adani.
‘Adani Pench Power Limited did not commence any project work before obtaining Environmental Clearance,’ said an Adani spokesperson. ‘While a complaint from an NGO was lodged with the Ministry of Environment and Forests (MoEF), a site-visit report obtained by MoEF from the Madhya Pradesh Pollution Control Board (07.01.2012) cleared Adani Pench Power of any wrongdoing.’
According to Adani, the site-visit report clearly stated that ‘it was found during the inspection that there is no Civil, Mechanical or Other works related to (the) Power Plant has been done by M/S Adani Pench Power Limited’.
Adani also denies displacing local villagers.
An Adani spokesperson said that the company ‘has not acquired any land from local farmers. Madhya Pradesh Electricity Board allotted land and infrastructure to Adani Pench Power Limited for the establishment of a 1320 MW thermal power plant (Letter no. 775 dated 29 January 2010 from the Government of MP, Energy Department, Mantralaya). The land and infrastructure has (sic) been registered in the name of Adani Pench Power Limited in the revenue records and any allegations related to forceful acquisition of land are false’.
Yet villagers were displaced by the government authority from which Adani acquired the land. Those villagers had to part with fertile land at low prices in the 1980s. The government profited enormously from the sale of this land to Adani and appears to have ignored the plight of those who kept working the land before Adani acquired it in 2010.
Villagers have also been displaced by the associated dam and impoundment. According to Aradhana Bhargav, water from the Pench River Diversion Project is available at Adani’s project site. She says this will deprive farmers of opportunities for irrigation.
Adani rejects this, saying that water supply for the project was allocated as part of the handover of infrastructure by the Government of Madhya Pradesh. It says that water from the Pench Diversion Project is allocated for multiple purposes including irrigation, drinking, upstream use and thermal power.
‘Less than 10% of the available water has been set aside for thermal power projects and the allocation to Pench Power Limited makes up a part of this allocation,’ said an Adani spokesperson. ‘Water allotted to the project is as per the approved plan for the Pench Diversion Project, without compromising the share of the water for local irrigation, upstream uses or domestic water’.
In February 2013, the affected farmers, under the banner of KSS, filed an appeal against the environmental clearance granted to the project and it was admitted by the National Green Tribunal. The Supreme Court, however, subsequently struck down this case through an order of 6 January 2014.
Local people fighting the project organized protests. Rallies were held in the streets of Chhindwara. Media reports refer to a barricade built on a public road between the residents of five villages and Adani’s construction site.
Things took an ugly turn. In November 2015, the secretary of KSS, Sajje Chandravanshi, and others were brutally assaulted. Unknown assailants with alleged links to the Adani group were said to be the perpetrators in some media reports. Instead of bringing the culprits to justice, local police were accused of harassing dissenters by breaking up meetings and dismantling protests. Earlier, during Medha Patkar’s arrest by the local police on false charges of disruption of law and order, Bhargav too was jailed and later released on a conditional bail which prevented her from travelling to Chhindwara.
These incidents followed an earlier assault in May 2011 on advocate Aradhana Bhargav, vice president of the KSS, and former legislator Dr Sunilam. Media reports have said that ‘company goons’ were behind this attack. A formal complaint was lodged by Bhargav and Dr Sunilam, a former legislator belonging to the Samajwadi Party, against unknown persons at the Chhindwara police station in 2011. Although both Bhargav and Sunilam sustained head injuries which could have been fatal, the relevant section of the Indian penal code relating to attempted murder was not utilised by the police.
Years have gone by, a prosecution has dragged on in the courts, but the perpetrators of the above attacks have yet to be brought to justice.
‘We refused a huge sum offered to us by Adani’s people in lieu of giving up all protests, which we refused, hence we are risking our lives daily as our assailants are still roaming freely’, said Bhargav.
Adani seeks extension of permit despite failure to make substantive progress
According to Adani’s environment impact assessment, 300 ha are required for the 1320-MW power station, including the main plant and all its auxiliary systems, township, ash disposal area and greenbelt. It said that there were ‘no Rehabilitation and Resettlement (R&R) issues involved’. Adani says that after obtaining its environment clearance, early infrastructure development works such as erecting boundary walls, site office and stores construction commenced. Pre-construction activities such as basic engineering, technical specifications of the project and technical studies were completed but on-the-ground construction of the thermal power plant had not started.
In 2019, Adani applied for an extension to its environmental clearance. Adani’s justified applying for the extension by arguing that previous policies of the central government on coal procurement (‘fuel linkage’) had impeded development of the project but that, with those policies no longer in force, the project could be revived. However, in the case of the Pench project, when the MOU was signed by Adani with the Madhya Pradesh government, the company was fully aware of the ‘fuel linkage’ constraints. It knew that government policies of the time did not allow local coal supply. In fact, Adani had explicitly stated that the coal would be imported from sources such as South Africa and Indonesia. To blame the lack of fuel linkage squarely as the only reason for Adani’s delay in progressing the project appears untruthful. Google maps indicate that no major works on the project have occurred.
However, a spokesperson for Adani denied any irregularities, saying that due process had been followed by both government and corporation, with ‘no falsification, concealment or misrepresentation of facts and information’.
Economic viability questionable
One major issue plaguing India's power sector is over supply and slumping demand. This is a result of sluggish growth in the economy, over estimation of demand by the central electricity authority (CEA), and the impacts of the lockdown caused by the Covid-19 pandemic.
According to the Institute for Energy Economics and Financial Analysis (IEEFA), a large number of Indian thermal power stations are already at risk of becoming ‘stranded assets’. In December 2019, IEEFA said that the US$40-60 billion of non-performing or stranded Indian thermal power assets, which is placing stress on a troubled banking sector, is undermining the flow of capital critical to sustain strong Indian economic growth.
‘Stranded assets in the thermal power sector are accumulating unfunded interest expenses that are unlikely to ever be paid,’ said Tim Buckley, IEEFA’s director of energy finance studies. ‘Significantly, they’re also hampering the banks’ ability to invest in clean new renewable-energy projects to meet both India’s electricity demand needs and the country’s ambitious world-leading renewable energy targets. While sinking in debt, the banks are unable to extend the necessary flow of capital critical to sustained, strong economic growth in India.’
Meanwhile, the renewables sector has been undercutting the cost of power from new – and even some existing – thermal power stations. According to IEEFA, renewable energy prices dropped by some 50 percent over 2017 for both solar and then wind, while investors offered 2.40-3.00 rupees per kilowatt hour. This put domestic renewable energy prices about 20-30 percent below the cost of India’s existing domestic coal-fired power generation costs, and even below the cost of plants powered by imported coal or imported liquified natural gas.
Against such a background, why did Madhya Pradesh sign a power-purchase agreement at Rs.4.79 per unit, when cheaper renewable energy sources were available? A case in point is Adani Green Energy, which has approval from the CERC for a solar-plus-wind (hybrid) project for 600 MW at Rs 2.69 kWh tariff, slotted to come on stream by 2022.
Energy commentators say that Madhya Pradesh has approved about 21,000 MW through long-term agreements even though its peak demand in 2019-20 was 14,886 MW. They question why the Madhya Pradesh government approved this project which is supposed to come up by 2026, when it had options of renewable plus storage, with round-the-clock power supply. Surprisingly, these bids were recorded as low as Rs 3.60 per unit. The same commentator says that, in India, new renewable capacity is coming up far more quickly than thermal capacity, especially with the recent deregulation, so why lock in a highly polluting thermal power plant?
The Madhya Pradesh government is reported to have argued that jobs, tax revenues, ancillary businesses, savings from inter-state transmission charges, and related benefits from the Rs 12,000 crore (AUD $2 billion) investment the project will generate as the reason why it has endorsed it.
These arguments are rejected by 28 civil rights and grassroots organizations, led by the National Alliance of People’s Movements (NAPM) and the Narmada Bachao Andolan (NBA), that have opposed the Madhya Pradesh government’s decision to enter into the agreement with Adani for the Pench power plant.
As is the case with other controversial Adani projects such as the 1600-MW Godda thermal power plant in Jharkhand, the Pench thermal power plant seems a case of crony capitalism.
Dissenters keeps up the fight
In July 2020, Aradhana Bhargav told AdaniWatch that ‘we are demanding scrapping of the Adani thermal plant and urging the government to instead consider building a floating solar power project on the waters of the Machagora reservoir of the Pench River Dam and Diversion Project’.
The demand comes in the wake of Prime Minister Narendra Modi inaugurating the massive Rewa solar power project and suggesting more viable renewable-power projects in Madhya Pradesh. One project currently under development is the Khandwa Onkareshwar reservoir-based floating solar-power scheme.
“If the Khandwa floating solar-power project can come up, so can the Machagora reservoir project. It involves no land acquisition, no felling of trees, no damage to the fish population, drinking water, irrigation water and certainly no pollution”, said Bhargav, adding that they are additionally demanding return of the farmers’ land.
During former Chief Minister Kamal Nath’s tenure during 2017-18, Bhargav had written to him asking him to consider returning land to farmers as was done by the government in the adjoining state of Chhattisgarh. The land concerned had been acquired for a steel plant project subsequently abandoned by the Tata corporation.
‘We have written to the President, Prime Minister and Chief Minister about our demands. The government can certainly do this and stop environmental and social damage, and at the same time sell clean renewable solar power to earn revenue.’
‘It did not keep its promise of providing one government job per affected family, subsidised electricity to affected people and fair compensation, but at least now it can make amends’, concluded Bhargav.
KSS is planning to start a signature campaign in Madhya Pradesh in support of their demands put to the government.