The Raipur regional office of the ministry had earlier pointed out at least 11 instances of non-compliance of terms and conditions outlined in the Environment Clearance of the 1370-MW power plant which the Adani Group has been operating for the past five years. The original approval of the power plant was provided to the project’s former owner, the GMR Group, by the Congress-led United Progressive Alliance (UPA) government on 9 May 2011.

The Adani Group submitted a report on ‘action taken’ on 13 September 2024 in which it detailed the steps it claims to have taken against each of these non-compliances and also outlining its further course of action. Based on this report, the ministry’s Expert Appraisal Committee (EAC) – an expert body which reviews potential environmental impacts of coal-power projects – recommended Environmental Clearance (approval) for the expansion in a meeting held on 1 October 2024.

The project is also enmeshed in at least 15 litigations in various courts. But the project proponent assured the EAC that none of these litigations pertains to the matters of the environment and forests, and no ‘show-cause’ notices had ever been issued to the owner of the power plant.

Issues raised at public hearings

The most prominent issues of non-compliance pertained to commitments that were made during a public hearing that was held over 15 years ago. Adani Power told the ministry that though it has asked Chhattisgarh’s state pollution control body, the Chhattisgarh Energy Conservation Board (CECB), for the details of the public hearing that was held on 15 January 2009, the documents are yet to be provided.

The 2009 public hearing for the GMR project was conducted amid massive opposition from local communities to the establishment of the coal-power plant. Approximately 344 ha of land was acquired for the project, nearly half of which belonged to private land-owners. Large parcels of this land were being farmed and belonged to families belonging to tribal communities and to communities designated as Scheduled Castes (Dalits) by the government of India. According to media reports, the public hearing had to be called off due to vocal protests. This public opposition caused significant delays in the acquisition of land for the project by the GMR Group. Local communities were worried about additional environmental pollution from the coal-power project because they were already ‘facing health problems due to pollution’ caused by neighbouring coal-power plants. Opponents of the project called for a general strike throughout the Tilda area at that time.

According to a study conducted by the Delhi-based Center for Financial Accountability (CFA), an organisation working towards transparency and accountability in the finance sector, local communities were against the project from the very beginning:

‘The villagers were dissatisfied by the GMR authorities who wouldn’t allow the villagers to express their grievances and favored those who spoke in favor of the company. The protest went to such an extent that the villages called for a Tilda bandh [a general strike] on 2nd February 2009.

‘People have been complaining about how little they were compensated for their lands, … as compared to the market rates, duping the innocent farmers of land and water. Out of the 343.98 ha, 170.77 ha is the government land and 173.20 ha has been acquired from private landowners including ST [Scheduled Tribes], SC [Scheduled Caste] and others.’

The report went on to quote government figures saying that families from scheduled tribes had lost 8 ha, those from scheduled castes had lost 39 ha, and others had lost 241 ha. As per the environmental approval granted in May 2011 to GMR Group, out of the total land required for the project, 37.23 ha is double-crop (per annum) agricultural land and 130.71 ha is single-crop agricultural land.

GMR Group was alleged to have begun construction work before environmental approval was granted. The Chhattisgarh government forcibly stopped construction work on the project in July 2010. At that time, Chhattisgarh was being ruled by a BJP government headed by chief minister Raman Singh.

‘Vidhan Mishra, former Chhattisgarh state Industry Minister, on whose request the action was taken by the CECB extended his concern towards people of the nearby villages – Gaitara, Chicholi, Bhatapara and Murra – who will face water scarcity with little to no drinking water available in summers. The project even got a Rail Transport Clearance for transporting coal by road for a period of three years starting 2014 since there were delays in construction of railway siding for the plant,’ the CFA report states.

In its response to the alleged non-compliance, Adani Power Limited told the ministry that after acquiring the plant, an action plan on issues raised at the 2009 public hearing was prepared as suggested by the CECB.

During the 2009 public hearing, local communities spoke of their needs for employment, education, adequate health facilities, community infrastructure and sustainable livelihoods. Adani Power Limited claimed that it is already working on these issues with funds earmarked for activities covered under the company’s ‘corporate social responsibility’ (CSR) obligations. These activities are being undertaken in an area falling within a 10-km radius of the power plant. The company claims to be focusing on 16 villages around the plant boundary for undertaking these activities. Adani Power also claims that a fund of more than Rs 50 crore (US $6 million) has been allocated for fulfilling CSR obligations. The company claims that local communities are satisfied with the development work that is being undertaken by the company.

Adani Power also said that a needs-based assessment and a social-impact study have been prepared through the Indian Institute of Social Welfare and Business Management, a leading government-owned autonomous business school based in the eastern Indian city of Kolkata. Adani Power submitted an undertaking to the ministry stating that it will not only comply with all the conditions stipulated in the environmental clearance of May 2011 but it will also fulfil all commitments made during the public hearing held for the expansion project on 12 June 2024.

How the Adani Group acquired the power plant

The coal-power station ran up a large debt for the GMR Group due to the refusal of state-owned coal suppliers to sign long-term supply agreements until the project had a long-term ‘power purchase agreement’ (basically, a contract). The company could only manage to secure short-term contracts. The source of coal for the power plant was amended by the ministry in 2014 by adding imported coal from Indonesia along with South Africa and a maximum of 50% of domestic coal obtained through e-auctions.

In 2017, the GMR’s consortium of lenders converted this debt to equity under the strategic debt restructuring (SDR) plan devised by India’s apex bank, the Reserve Bank of India, to tackle the non-profitable assets of public-sector banks. The Adani Group completed acquisition of the power plant in August 2019 at a cost of Rs 3530 crores (US $420 million).

Non-compliance with conditions pertaining to pollution

Fly ash generated from the combustion of coal is a major source of environmental pollution. When environmental approval was first granted to the project, it was stipulated that average ash content in the coal used should be no higher than 34%. It was also stipulated that if the quality of the coal changed, a fresh application would be made to the ministry for suitable amendments to the environmental-approval conditions.

The environmental clearance letter of 9 May 2011 stated (section vii): ‘Sulphur and ash contents in the coal to be used in the project shall not exceed 0.5% and 34% respectively at any given time. In case of variation of coal quality at any point of time fresh reference shall be made to MOEF [the ministry] for suitable amendments to environmental clearance condition wherever necessary.'

However, the ministry’s Raipur regional office stated in its report that the average ash content of the domestic coal used by the plant was 39.5%. A quarterly report for the period January-March 2024, which was submitted by the project proponent to the ministry, showed that the average ash content in coal used was a whopping 41.13%. The ministry argued that the project proponent had changed the quality of coal without amendment to the environmental clearance. However, the Adani Group justified this by citing an office memorandum issued by the ministry on 11 November 2020, whereby coal-power plants were allowed to change the quality of coal without amending the environmental clearance under certain conditions. This change in policy by the Modi government had been the subject of much acrimony amongst pollution watchdogs.

As far as sulphurous emissions from the power plant are concerned, Adani Power Limited committed to the ministry through its action plan that it will install the requisite Flue Gas Desulphurization (FGD) system before 31 March 2026. Most coal-power plants have missed the deadlines to install FGD systems – meant to control toxic sulphurous emissions – despite several extensions. It is unlikely that the FGD system will be installed in the Raikheda power plant given the recent change in policies of the Modi government. The government’s top policy think tank, the Niti Aayog, has recently allowed coal-power plants to stop installing FGD systems.

Further, the ministry found that no details had been furnished by the project proponent regarding a required in-built mechanism for continuous monitoring of radioactivity and heavy metals in coal and fly ash. The project proponent replied that it will apply for an exemption to this clause, claiming that the necessary technology for such monitoring is not available in India.

These environmental violations have been taking place even though the project site is in proximity to forest areas. The Mohrenga protected forest is adjacent to the plant boundary. Similarly, the Khaulidabri protected forest – a Nature Safari area – is about 2.9 km from the project site.

Corporate Social Responsibility (CSR) activities

The ministry’s regional office alleged that though Adani Group was reportedly undertaking CSR activities, documents were not made available in support of the claim that three villages have been the beneficiaries.

The environmental clearance letter of May 2011 stated (section xxvi): ‘At least three nearest village[s] shall be adopted and basic amenities like development of roads, drinking water supply, primary health centre, primary school etc shall be developed in co-ordination with the district administration.’

The ministry also alleged that a progress report on the proponent’s CSR commitments was not available. To this, the Adani Group responded that it had not only increased the CSR budget to Rs 50.15 crore (US $6 million) but had undertaken social activities in a total of 16 villages within a 10-km radius of the power plant.

The ministry found several other shortcomings in the implementation of the terms and conditions of the environmental clearance letter and the various amendments that had been made by the ministry from time to time. It was found that solar panels had not been installed on available rooftops in the plant premises in violation of the terms and conditions. The project proponent claimed that the work has been prioritised and that more than 3 MW capacity solar power will be installed by the year 2025.

Furthermore, the project proponent furnished details of the quantity and quality of coal transported, the source of coal, the mode of transportation, number of electricity units generated, and plant load factor only after its non-compliance was reported by the ministry.

The existing coal requirement for the project is 6.77 MTPA. The project proponent has said that an additional 6.6 MTPA of coal will be required after the expansion takes place. Out of this, around 4 MT coal will be sourced from the Adani Group’s proposed Gondulpara coal mine in Jharkhand (which faces enormous local opposition) while the balance will be obtained through e-auctions. It has further said that once the expansion has occurred, the plant will employ an additional 276 people. At present 238 people are employed in the unit. Therefore, after the proposed expansion, the total manpower of the unit is projected to increase to 514.