India Coal
Pench Part 3: Political favours for Adani’s Pench coal-fired plant in central India
Jul 08, 2021
Gautam Adani - the Adani Group's proposed Pench coal-fired plant has been the subject of favourable treatment by Congress and BJP alike.

The Adani Group plans to build a massive coal-fired power plant in central India. Community opposition to the Pench power project has resulted in vicious bashings of protest leaders. The proposal has also been dogged by accusations of procedural irregularities, highly questionable decisions by government, and a tendering process tailormade by government for Adani’s proposal. It is also plagued by unresolved court cases. These have occurred against a background of political turmoil, including the fall of an elected state government.

In March 2020, as India was facing the beginning of the COVID-19 pandemic, the central Indian state of Madhya Pradesh underwent a political crisis in which the state government lost its majority, forcing the Chief Minister to resign. While these events dominated headlines, quiet steps were taken by the teetering Madhya Pradesh government to revive a 10-year-old proposal by the Adani Group for a large new coal-power plant.

Adani won a contract to build the 1320-MW Pench power station near the town of Chhindwara in 2010. (See interactive map for precise location) However, the project had been stalled for a decade, having faced resistance from the local community, with petitions pending before India’s special court for environmental law and the Supreme Court. The revival of the project appears to have been a mission taken on by senior Congress party leader, Kamal Nath, both as a member of the national Parliament in 2012, and later as Chief Minister of Madhya Pradesh.

In this article AdaniWatch can reveal that an environmental approval (referred to as ‘clearance’) was granted for the project by India’s central environment ministry in 2012 following a direct request made to the environment minister by Kamal Nath, who was then a minister in a Congress-led coalition in New Delhi. Documents accessed by this reporter show that the clearance was granted shortly following a conversation between Kamal Nath and the then environment minister regarding the matter. Further, according to a person who worked in the ministry at the time who spoke to this reporter on condition of anonymity, the clearance was granted despite advice to the contrary by the ministry’s own technical experts and consultants. Documents accessed by AdaniWatch show that the clearance was granted in violation of the Environment Ministry’s own rules.

Former Chief Minister of Madhya Pradesh and former minister in central government, Congress MP Kamal Nath. Courtesy Flickr

No progress on the power plant took place for seven years following the grant of the environmental clearance, apart from a discreet effort later abandoned by the Madhya Pradesh state government (ruled by the BJP) to take the project out of Adani’s hands. As Adani was unable to secure a power purchase agreement for the electricity it would generate, it had not begun any construction work on the project. However, after the Congress won the state election of December 2018, the project was revived, with Chief Minister Kamal Nath signing a power-purchase deal with Adani in his government’s dying days.

According to the government’s own data, Madhya Pradesh is an energy-surplus state and has already installed 10,000 MW worth of power-generation capacity over and above what it uses at its peak. (Part 4 of this series of stories on the Pench power project will explore this issue) The state is projected to pay ₹5.8 billion (about US $80 million) to private power-generation companies in 2020-21 for power it can’t and won’t use. Why then did the state sign another contract to buy electricity from the Adani Group’s proposed new coal-fired plant?

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Pench Part 3: Political favours for Adani’s Pench coal-fired plant in central India

How Adani bagged the project

The plan by the Madhya Pradesh State Electricity Board (MPSEB) to set up a thermal power plant in the Chhindwara district had languished since the 1980s.  Then, in 2009, the Adani group entered the scene. A document on Adani Power’s website says ‘Adani Power Limited (APL) has signed an MoU [memorandum of understanding] with Energy Department, Government of Madhya Pradesh on 8th July, 2009 for developing a Thermal Power Project of 1320 MW capacity near Chausara, District Chhindwara, Madhya Pradesh. For this purpose Adani Power Limited (APL) has registered Pench Thermal Energy (MP) Limited.’

On 4 February 2010, the state power-supply corporation, MPSEB, issued a Letter of Interest (No. 07-11/IPC/Pench-LoI/41) to Adani Power Limited (APL) for the installation of a 1320-MW coal-fired power station on land that had been acquired from farmers in the late 1980s. Clause three of the document stipulated that the MPSEB was to transfer the legal ownership and possession of the land to APL once payment had been made.

Usually, for such a project to be handed over to a private developer by a state-owned company, the government invites bidders by issuing a tender. Such a process appears to have been absent in this case. Instead, the public filings by all the government entities concerned seem to indicate that the decision was made to hand over the project to the Adani Group without any tender having been issued. The Adani Group has claimed that it entered the project through a legal bidding process but if it did, the details of that process remain unknown. Such details, if they exist, would include the names of other companies that participated in the bidding, the terms and conditions of the process, and whether there was a reserve price.

The 2009-10 annual report of Adani Power mentions nothing about the company winning a tender to set up a power project in Madhya Pradesh. Instead, it says ‘Chhindwara Power Project, being developed by Adani Pench Power Limited (Adani Pench), a wholly owned subsidiary, pursuant to a Letter of Intent (LoI), from Madhya Pradesh Power Trading Company Limited (M.P. Tradeco) to set up a 1320 MW thermal power project based on super critical technology. A notice inviting tenders for EPC works has been floated. In addition, land and water required for the implementation of the Chhindwara power project have been reserved. An application for coal linkage to meet the requirements of the Chhindwara power project has been made. By FY15 entire 1320 MW capacity is expected to be commissioned.’

A 2011 evaluation of the state’s power-development program says that the state government had announced a policy inviting private-sector participation in the power sector through the Memorandum of Understanding (MOU) route. Under the policy, the Madhya Pradesh government would assist private developers to secure land, fuel and water. Neither the MP Energy Department nor the MP Power Trading Company Limited mentioned anything in their annual reports of 2008-09 or 2009-10 about them floating a tender for setting up a thermal power plant in Chhindwara, let alone the granting of the tender to the Adani Group.

Instead, the public documentation shows that the Adani Group simply paid the Madhya Pradesh state government company in order to take over the project. A letter sent by Madhya Pradesh Power Trading Company Limited (MPTCL) to Adani Power Limited (No.07-11/IPC/Pench-Adani/354), dated 21 August 2010, said that Adani Power had to pay Rs. 469.936 million (US $6.4 million in August 2010) to MPTCL for handing over the possession of ‘299.614 hectare land along with infrastructure created thereon currently under the possession of MPSEB (Madhya Pradesh State Electricity Board).’

National environmental approval, courtesy Kamal Nath’s intervention

On 27 February 2010, Adani Power applied for environmental clearance for the project to the then Ministry of Environment and Forests of the union government. According to the Ministry’s procedure for assessing such applications, an Expert Appraisal Committee considered the application and asked Adani Power to submit detailed terms of reference for an Environmental Impact Assessment, saying ‘the environmental clearance shall be applied only after firm fuel and water linkage and other statutory clearances as applicable are obtained.’ (Emphasis added)

However, on 16 October 2012, the Ministry of Environment & Forests sent its conditional approval for the environment clearance to Adani Power [vide letter no. J13012/30/2010-IA.II (T)]. The letter stipulated that the project was to commence operations within five years, and that the company was to submit a monthly compliance report once every six months to the ministry.

Documents accessed by this writer show that the then Minister of Urban Development, Kamal Nath, spoke to the then minister for Environment and Forests, Jayanthi Natarajan, advocating for the environment clearance for Adani’s Pench project in the period between the ministry’s letter in July 2011 and the conditional approval in October 2012. Kamal Nath was the elected representative to the Lower House of India’s Parliament, the Lok Sabha (People’s Assembly), from the Chhindwara constituency at the time.

Minister for Environment and Forests, Jayanthi Natarajan, at the time of environmental approval for Adani's Pench coal power project. Courtesy Economic Times

One particular document in the MoEF file shows that while processing the application of Adani Power for environment clearance, the ministry had asked the state’s Principal Chief Conservator of Forests to clarify certain details of the status of the land. On 15 March 2012, in her own handwriting, Minister Natarajan wrote on the document ‘Minister Kamal Nath ji spoke to me, since this is his constituency. Please get details urgently.’

The note has a fax number 011-23793396 written by hand on top of the page. This fax number, as per Lok Sabha records, is of the address 1, Tughlak Road, New Delhi – the then government-assigned residence of Kamal Nath.

The Environment Minister notes the intervention of colleague Kamal Nath (March 2012).

A person who was employed at the ministry at the time, speaking to this correspondent on condition of anonymity, said there were problems with the approval. An expert panel that went through Adani Power’s application raised a number of questions concerning the Environmental Impact Assessment and the status of the land, this person said. Their view is that it was ‘Kamal Nath’s push that helped Adani Power secure the environment clearance.’

Indeed, the environment clearance granted to the project appears to violate the ministry’s own publicly available rules and regulations.

For such a clearance to be granted, an Environmental Impact Assessment (EIA) has to be conducted according to the ministry’s technical guidelines. Adani Power Limited appointed a private company to do the EIA. This undated and unsigned report on the official website of the Madhya Pradesh Pollution Control Board defines the study area as the land within a 10-km radial distance from the centre of the proposed plant site. Even though the report gives a clean chit on the project’s possible environmental impact, it reveals some dubious aspects of the project.

The document asserts that the project site is more than 500 m away from the river’s flood plain, in line with relevant specifications in the ministry’s technical guidelines for EIAs for coal-power projects. In the case of the Pench project, however, photographs taken after the monsoon of 2019 show that the floodwaters of the Pench diversion project had entered the project site, breaching its boundary wall, placing it clearly within the riverine system’s floodplain. That a section of the project site floods every year was further confirmed to the author by local residents Sajje Chandravanshi and Kamlesh Chandravanshi.

Floodwaters from an irrigation scheme partially immerse the boundary wall of the site for the Pench coal-power project, which is supposed to be at least 500 metres distant from floodplains and rivers. Image Ankit A.

 

Another such guideline is that siting of coal-power stations is to be avoided ‘avoided within 25 km of the outer periphery of national parks and wildlife sanctuaries.’ However, according to an affidavit filed by activist Medha Patkar before India’s National Green Tribunal, the formal buffer zones of the Pench National Park and Tiger Reserve are closer than 25 km to the project site.

The Pench National Park and Tiger Reserve. Image BigCatsIndia

Under ‘general siting guidelines’, the ministry also specifies that ‘no prime agricultural land shall be converted into (an) industrial site.’ As AdaniWatch reported in part 2 of this series, the project site for the proposed Pench power station is indeed prime agricultural land, with farmers who owned the land growing multiple crops every year.

It appears that Kamal Nath’s lobbying may well have been instrumental in the environmental clearance given to the project. However, ex-minister Jayanthi Natarajan, in a telephone conversation with this reporter, said that she does not remember the project or her handwritten note about Kamal Nath’s call. She said many of her ministerial colleagues used to enquire about the environmental clearances of projects in their constituencies and Kamal Nath might have called for that reason.

A questionable extension to Adani’s environmental approval

Between 2010 and 2017, Adani had managed only to construct a boundary wall at the site. In each of its six-monthly compliance reports filed with the Environment Ministry, the company repeated the same explanation for its failure to commence major works – that ‘financial closure is yet to be achieved and thermal power plant construction work is yet to start.’

The company’s 2012 environmental approval was due to expire in late 2017. With major works yet to commence, the approval – and therefore the entire project – was in jeopardy. However, an amendment issued by the Environment Ministry in April 2015 (the first year of the government of Narendra Modi) extended the validity of all existing approvals by a further two years. Conveniently for Adani, this amendment took place less than 50 days before the expiry of the validity of another of Adani’s coal-based projects – the 2640-MW thermal power plant at Dahej, in Gujarat. In fact, this amendment extended the environmental approvals of three thermal Adani Power power projects – at Dahej, Pench and Anuppur. This decision by the Modi Government was therefore of huge benefit to the Adani Group.

Floodwaters from the Pench water project inundate the environs of Adani's Pench coal plant site during the 2019 monsoon - even though the site is supposed to be at least 500 metres from a floodplain.  Image Ankit A.

A proposal for the state to take back the project

In late 2018, a new round of action began, with a quite extraordinary proposal from the Madhya Pradesh government.

On 4 October, while Madhya Pradesh was gearing up for Assembly elections in December, the re-named state power company invited expressions of interest from parties interested in transferring yet-to-be-started large power projects back to the state. However, the projects had to meet rather narrowly defined criteria.

In detail, the Madhya Pradesh Power Management Company Limited (MPPMCL) invited Expressions of Interest (EoI) from interested parties ‘who already have MoU/IA/LOI with the State/MPPMCL and have sufficient land for setting up 1320 MW Thermal Power Project with major clearances but are unable to set up the power project on their land for the want of Coal linkages etc and are interested to transfer their land, clearances, SPV, etc. for development of the Power Project through tariff-based competitive bidding.’ The document stated ‘the State has, in the past, developed projects and understands that the Land acquisition for a thermal power project is a complex process and takes about 2-3 years as it involves significant rehabilitation and resettlement’ as the reason for inviting EoI from only those parties who had land, permissions and clearances from the relevant authorities already in place.

The document said that, even though the state of Madhya Pradesh was able to provide 24x7 uninterrupted power in the state including in rural areas and 10 hours of uninterrupted supply for agricultural purposes, it had been found that ‘from FY (financial year) 2024-25 onwards there will be requirement to plan for Capacity Addition of 1320 MW.’

The criteria to participate in the tender were: ‘a) The Bidder must be a Greenfield project located in the State of Madhya Pradesh; b) The Bidder must be a developer having MoU/IA/LOI with the State of Madhya Pradesh or MPPMCL; c) The Bidder must be in possession of sufficient land in MP for development of 1320 MW Thermal Power project without any encroachment or dispute/litigation; d) The Bidder has Water Allocation sufficient for 1320 MW Power Project; e) In addition to the above, it will be preferable if the Bidder has other clearances like Defence clearance, Consent for establishment and Chimney height Clearance etc.’ The deadline for private bidders to submit their expressions of interest was 22 October 2018.

The criteria for expressions of interest exactly matched the situation of Adani’s Pench project (with the exception that the Pench project was subject to litigation). On the face of it, therefore, these steps appear to have been a plan for Adani Power to sell the 300-ha Pench project site back to the government. Officials from the state energy department with whom this writer spoke, on condition of anonymity, said that at the time there was no other company in the state that had a valid LoI with the state government which had this much land with all the permissions to establish a thermal power plant of exactly the specifications stipulated in the invitation.

In December 2018, after 15 years in power, the BJP (to which India’s Prime Minister Narendra Modi belongs) lost an election in Madhya Pradesh and a Congress government led by Kamal Nath came to power. Kamal Nath had successfully made the transition from national politics to chief minister of a state.

A month later, on 25 January 2019, MPPMCL floated another tender, to select two independent consultants to determine the value of assets of the Pench project site at Chhindwara. This appeared to signal that the government wanted to buy back the land that it had sold to the Adani Group nine years previously.

In March 2019, it was reported that the Madhya Pradesh government now intended to set up not one but two coal-fired power plants as part of its plan for electricity security. It was now projected that the state would need an additional 2640 MW by 2025-26. As it happened, as well as the Pench project, Adani Power owned another unfinished coal-fired power plant in the state – the Anuppur Thermal Energy (MP) Pvt Ltd, whose 1320-MW capacity combined with Pench to conveniently equal the 2640-MW total.

It remains unclear what happened to those tenders and why MPPMCL didn’t buy the properties from Adani Power.

Adani asks for more time – again and again

On 31 August 2019, with its extended environment clearance set to lapse in October, the Adani Group company applied for another extension to the approval, this time for five years. The company’s justification for requesting an extension, in bold letters, said ‘due to the then prevailing policies with respect to coal allocation, no coal linkage was granted for the project, in the absence of which the project could not be completed.’ (The term ‘coal linkage’ means a defined domestic source of coal for a particular project)

Was this a misrepresentation? In its initial application for environment clearance, Adani Power had stated that it would use imported coal until domestic coal was made available. The Environment Ministry's internal notes and its letter granting the clearance also quoted this statement by the company. The absence of ‘coal linkage’ had therefore been accepted by both the company and the government at the time of the project’s approval. It therefore seems a bit of a stretch for Adani to blame these long-standing government policies and non-availability of coal for its lack of work on its project.

Nevertheless, the company repeated the claim in its six-monthly compliance report of environmental clearance April-September 2019.

Adani repeats the excuse of 'lack of coal linkage' for failure to start work on the Pench project (report to ministry, late 2019)

The application for an extension of the clearance was submitted ten years after the initial green light from the state government and nearly seven years after receiving the original clearance. It states what might have been the real reason for the company needing the extension. It said ‘... the construction of the Thermal Power Plant could not be started in the absence of Power Purchase Agreement (PPA) and Financial Closure. PTE(MP)L (Pench Thermal Energy (MP) Limited) would like to implement this project once the PPA is signed and Financial Closure is achieved.’

In other words, Adani had not secured a buyer for its power during the 10 years of its ownership of the rights to build the Pench power project. Its application, however, indicated confidence that the state might soon solve this problem.

An annexure to the application described the state government’s recently announced intention to tender for two 1320-MW coal-fired plants in Madhya Pradesh. State Cabinet had made this decision on 6 August 2019. The stated intention was to exploit a change of policy by the national government that would enable allocation of coal from particular deposits for long-term power contracts. The company sought extension of its environmental clearance through to 16 October 2022.

These documents give the impression that the company was confident that it would soon sign a power-purchase agreement with the MP state government. In any case, the national environment ministry granted the three-year extension on 29 November 2019. The only missing link in Adani’s Pench power project now was a contracted buyer of the power.

The state government obliges

On 18 September 2019, MPPMCL invited bids from interested ‘corporate entities’ to design, build, finance, own and operate (DBFOO) a new coal-fired power station with the capacity to generate 1320 MW of electricity that would use ‘super critical’ technology. The draft tender document assured bidders that MPPMCL would sign a long-term Power Purchase Agreement (PPA) with the bidder that quoted the lowest tariff per unit of electricity. The bid document stated that the project would be developed as a public private partnership (PPP) and the international financial consultancy PricewaterhouseCoopers (PwC) was appointed as the consultant for the auction.

According to documents reviewed by the author, in the statutory pre-bid meeting that is a part of such government auctions, it was pointed out by one of the private bidders that ‘super critical’ technology for thermal power plants was already obsolete – and that it did not adhere to the latest pollution-control norms and was heavy on fuel consumption. Hence, that bidder suggested, the project should be built using the latest ‘ultra-super-critical’ technology. This suggestion was not taken up by MPPMCL.

Another bidder pointed out that there were 34 existing thermal power plants in India which were financially stressed (unable to repay their debts). Their cumulative generation capacity was 40,130 MW. Of this, the bidder pointed out that 21,614 MW remained without any PPAs. Hence, that bidder asked, why couldn’t the MPPMCL consider signing an agreement to buy power from one of these already commissioned power plants instead of requiring bidders to set up a whole new power station?

The government’s reason for rejecting this suggestion was evasive. It said: ‘the State is in need of long-term power from FY 2026-27 onwards for 25 years. Also, the allocated Coal Linkage to the State under SHAKTI B (IV) is provided from FY 2026-27 onwards. The Govt. of MP, in order to optimise the cost of power procured, has decided to set up a New Power Plant in the State of Madhya Pradesh… hence no change envisaged.’

Another suggestion was that the bidders should be allowed to set up the proposed power station anywhere in India, or that those companies which were already setting up plants in other parts of India should be allowed to participate in the tender to increase competition. This would help reduce the power tariff discovered by the auction, this bidder argued.

MPPMCL refused to accept this suggestion.

It was also requested that MPPMCL consider allowing bidders to offer contracted capacity in multiples of 100 MW from their existing capacity.

This suggestion too was rejected.

A question was raised as to how a DBFOO project, where the bidder is going to finance, own and operate the project, can also be classed as a Public Private Partnership (PPP) project where, by definition, the ownership is shared with the government. MPPMCL answered that it just followed the terms of a Model Bid Document released by the Indian central government’s Ministry of Power.

One bidder suggested that it should be made mandatory to use Indian manufactured machinery (such as boilers, turbines, generators and other machinery) in accordance with the Modi government’s ‘Make in India’ policy. MPPMCL declined, saying that if the project is not financed by the government-owned Power Finance Corporation or Rural Electrification Corporation, it is not mandatory for the project to use ‘Make in India’ components.

It is pertinent to note here that the Directorate of Revenue Intelligence (DRI) – an agency under the national Finance Ministry that investigates violations of customs law – had charged Adani Power with money laundering through having allegedly inflated invoices for the import of coal from Indonesia and machinery for thermal power plants. A notice issued to Adani Power in that investigation says that the DRI found that between 2010 and 2013, Adani Power had transferred US $9,302,445 to the Shanghai Electric Group Co Ltd to purchase machinery for Adani Pench Power Limited and a total of US $41,500,000 was transferred to various other suppliers abroad for the Pench project. It therefore appears that the Adani Group was already locked into using Chinese equipment by the time the 2019 tendering process commenced, a fact that would have been known to relevant Madhya Pradesh government authorities.

 DRI Table indicates Adani was locked into using Chinese machinery in its Pench coal-fired plant.

DRI Table showing Adani locked into using Chinese equipment for the Pench coal-fired plant.

 

At the end of the pre-bid stage of the auction, five companies – Adani Power Limited, JSW Energy Limited, Moser Baer Power (MP) Limited, DB Power (MP) Limited and Moher Power Limited – were declared as Pre-qualified Bidders and a Request for Proposal was issued to them on 14 November 2019.

By the deadline of 17 February 2020, only three of these companies had submitted bids – Adani Power Limited (APL), JSW Energy Limited (JSWEL) and Moser Baer Power (MP). On 20 February, the bids were opened:

Bidder Name        Fixed Charge       Fuel Charge     Total Tariff  

                               Rs./ kWh               Rs./ kWh         Rs./ kWh

APL                        2.898                      1.892                4.790

MB.P.MPL             3.077                      2.330               5.407

JSWEL                   3.350                     2.146                5.496

 

Adani Power was duly declared the winner.

On 2 March 2020, the MPPMCL referred the tariff quoted by the winning bidder to the Energy Department of the Government of MP and, on 6 March, state cabinet approved the rate. On 9 March, a Letter of Acceptance (LoA) was issued to Adani Power, which was ‘acknowledged and unconditionally accepted’ on the very same day. A Power Supply Agreement (PSA) was executed between MPPMCL and APL subsidiary Pench Thermal Energy (MP) Ltd on 12 March 2020.

Adani’s Pench proposal was now on course. The company had successfully navigated several procedural road humps for its project by gaining two extensions of its environmental approval and securing a government buyer for the plant’s power. It had out-manoeuvred its competitors in the bidding process. Government acquiescence had been essential in meeting these objectives.  The question is, why did the Madhya Pradesh government tailor its processes so precisely to the Adani Group’s situation?

Political intrigue and convulsions

In January 2019, a month after coming to power, it was reported that Kamal Nath met Gautam Adani, chairman of the Adani Group, and Anil Sardana, MD and CEO of Adani Transmission Limited at the World Economic Forum at Davos, Switzerland. Remember, at this point, the MP government was still pursuing what appeared to be a tailormade plan for Adani Power to sell the project site back to the government. By the beginning of March, however, news reports said that the MP government would issue tenders for two new coal-power projects to be built and owned by other parties. Was it the Davos meeting that prompted this 180-degree turnaround in policy?

Chief Minister Kamal Nath at the Davos economic forum in January 2019, where it is reported he met Gautam Adani. Courtesy Flickr

In the crucial week between the MP government receiving Adani’s winning bid and issuing a government letter of acceptance to Adani Power, the government was teetering on the brink of collapse. A younger rival to Kamal Nath in the state Congress Party, Jyotiraditya Scindia, made a play to take down the government. Scindia was a scion of one of India’s erstwhile royal families and a member of a political dynasty that includes two former chief ministers and several significant political leaders across parties and was also seen as a close confidante of the Former Congress President Rahul Gandhi.

Ten Congress MPs, and then a further twelve, joined Scindia in rebellion, and were traced at a resort in Bangalore, in the BJP-ruled state of Karnataka, under the ‘protection’ of Scindia, and, apparently, the BJP. (In India, since 2014, rounding up of groups of legislators and virtually kidnapping them at high-end resorts is a common feature of such political defections that are often engineered by the ruling party at the centre). The MPs were reported to have said they were there of their own volition. Either way, the loss of 22 MPs would be enough to rob the Kamal Nath government of its majority.

On 8 March 2020, the day before the Letter of Acceptance was issued to Adani Power, Chief Minister Kamal Nath accused the BJP of holding the 22 legislators captive at the Bangalore resort, and it was reported that they had stopped communicating with the state Congress leadership. Two days later, on 10 March, Scindia, along with 19 of the 22 legislators, resigned from the Congress party (and in some cases from Ministries they had been assigned). The Kamal Nath government had lost its majority.

Only two days later, on 12 March 2020, in the middle of this political drama, the Power Supply Agreement was executed between MPPMCL and the Adani subsidiary Pench Thermal Energy (MP) Limited.

A week later, on 19 March, India’s Supreme Court ordered a ‘floor test’ (in which a government is required to demonstrate its majority in an Assembly vote), and the following day, on 20 March, Kamal Nath resigned. On 23 March, the BJP’s Shivraj Singh Chauhan returned to the post of Chief Minister that he had vacated after losing the 2018 state election. Sections of the Indian media described it as a ‘coup’ by the BJP.

But by then, Adani had its power contract and the approval of its environmental extension.

No comment

A former minister in the Kamal Nath government, who spoke to this writer on condition of anonymity, told this writer that the government took the decision to go ahead with a new private-sector coal-fired power plant based on the demand projection submitted by the state power authority (MPPMCL). On specific questions on why the MP government did not opt for contracts with financially stressed power stations, which would have resulted in much lower tariff, he answered that the government wanted a power station within the state which would generate GST (goods and services tax), thus benefiting Madhya Pradesh through revenue generation. When it was pointed out that the charges paid by the state power authorities to the power-generating company would be much higher than the expected GST, the former minister said he would have to compare the data to comment on that and had no idea about the exact figures paid by the state to power generating companies.

When asked why Kamal Nath sought environmental approval of a private thermal power plant from the environment ministry back in 2012, the minister declined to comment, saying that he was unfamiliar with what might have happened in 2012.

When asked why the Kamal Nath government was in a hurry to sign the LoI with Adani Power at a time when the government was in crisis, he refused to comment.

When asked why the government dropped the plan to acquire the land and licence/permission from Adani Power, he evaded the question altogether.

No response has been received to detailed questionnaires sent by the author on 27 March 2021 to Kamal Nath, Gautam Adani, Power Minister of Madhya Pradesh and the secretary of the power department of Madhya Pradesh.

Construction of the Pench coal-fired power plant has yet to commence. Its current environmental approval expires in October 2022.