In the cover story of The Caravan’s March 2018 issue, “Coalgate 2.0,” Nileena MS reports that a joint venture of the Adani Group and a Rajasthan power corporation that is currently exploiting a captive coal block in Chhattisgarh is in clear contempt of the Supreme Court’s landmark 2014 ruling regarding the “Coalgate” scam and in breach of later laws, yet has faced no action under the Modi government. The Supreme Court had declared illegal 214 coal-block allocations, and noted a pattern of state-owned enterprises granting lucrative contracts to private firms to mine and deliver coal from their blocks. This compelled parties involved in exploiting the blocks to reapply for permissions and renegotiate all mining agreements under stringent new rules—and yet the joint venture continues to operate on the terms of a pre-2014 agreement, which gives the Adani Group control over it. Public documents show that existing arrangements promise the joint venture undue gains of at least Rs 6,000 crore. In addition, the Adani Group will receive an estimated rock-bottom benefit of Rs 1,000 crore through arrangements for a power plant that it is to run at the coal block. Nileena writes, “By anything but the most conservative estimates, these sums are likely to be far higher.”

In the following excerpt from the story, Nileena traces the history of the Adani Group’s legal troubles, and the conglomerate’s beneficial relations with state and central governments across party lines. She writes that it has benefitted greatly from investments by government-owned enterprises that have helped “shore up the finances of the Adani Group at a time when the conglomerate is massively indebted—as it has been for much of its history.”

The Adani Group has a history of highly favourable treatment by governments from across the party spectrum. It also has a long record of partnerships with state-owned enterprises that have proven detrimental to public interests but very advantageous to the conglomerate.

The forerunner to the Adani Group, a trading firm, was established in 1988, with an annual revenue of roughly Rs 2 crore. In the early 1990s, the Gujarat government, with the Janata Dal leader Chimanbhai Patel as chief minister, granted the company and a partner firm a cheap long-term lease on roughly a thousand hectares of land at Mundra, on the Gujarati coast, for the declared purpose of salt production. (Patel had come to power at the head of a coalition with the BJP, before reforming the government with the support of the Congress instead.) The partner firm pulled out of the project, and the Adani Group decided to build a port on the land instead. After the port became operational in 1998—the company had also ventured into trading coal by then—the group’s revenues hit Rs 2,800 crore. Within the first years of Modi’s term as chief minister, the Gujarat government handed over more than 5,500 hectares of additional land at Mundra for the Adani Group to also establish a special economic zone.

By 2006 the company was also building a thermal power plant at the site, and had signed a long-term deal to supply power to the Gujarat Urja Vikas Nigam Limited, the state’s electricity corporation. The Adani Group ventured overseas for the first time when it acquired a coal mine in Indonesia, and was soon the largest importer of coal in India. By 2007, its revenues stood at around Rs 17,000 crore.