Litmus test for Congress in Chhattisgarh: Will it hand over another coal mine to the Adani Group?

In June 2015, Congress president Rahul Gandhi toured North Chhattisgarh, walking through Adivasi villages nestled in the lush Hasdeo Arand forest, one of the last contiguous stretches of green cover in India, which now stands threatened by coal mining.

Gandhi assured the Adivasis who gathered to meet him in Madanpur village that if his party was elected to power, it would ensure their land was not taken away without their consent for the benefit of rich industrialists. Accusing BJP governments at the Centre and in Chhattisgarh of pursuing a lopsided development model, and mocking Prime Minister Narendra Modi’s promise of “achche din” or good times, he said at another meeting: “Achche din have come for two-three industrialists and bad days have come for the poor of Chhattisgarh.”

Although Gandhi did not name any specific industrialist, most in the audience saw his comments as a reference to the Adani Group, which had bagged contracts to operate four coal blocks in the region.

The coal ministry had allotted these coal blocks to state government-owned electricity companies for captive use, which meant they could mine the coal strictly for consumption in their own power units. The state electricity companies had in turn signed up Adani Enterprises as mine developer and operator to start and run the mines and supply coal to them at pre-determined prices.

With these contracts not available in the public domain and not accessible under the Right to Information Act, as Business Standard reported, independent experts have expressed concerns over the terms possibly favouring private companies over the public interest.

Taking such a view, in May 2018, then Congress state president Bhupesh Baghel accused the Modi government of providing Adani backdoor entry to coal mining through such contracts.

Later that year, in December, Congress won the Chhattisgarh assembly elections and formed the government in the state with Baghel as the chief minister. Among the portfolios he reserved for himself were energy and mining.

Now, four months later, the BBC reports that Chhattisgarh government’s power generation company has selected Adani Group to develop and operate two coal blocks – the Gidhmuri and Paturia coal blocks in Korba district. These lie in the same area that Rahul Gandhi visited in 2015. Among the four villages which will face displacement, if mining takes place, is Madanpur, the village where Gandhi made assurances to local Adivasis.

Shailendra Kumar Shukla, Chairman of Chhattisgarh Power Generation Company Limited was quoted in the BBC as saying: “Bids had been invited [for the selection of the mine developer and operator for Gidhmuri and Paturia blocks] and the process stands completed. Adani and its allied companies were found suitable for this.”

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In an interview to Scroll.in, however, Shukla said he meant the tendering process had been completed, not the selection process. “Adani emerged as the lowest bidder but no agreement has been signed yet,” he said.

Scroll.in emailed questions to Chief Minister Baghel through his media advisor, asking whether he had changed his mind on the question of mine developer and operator contracts. His comments were also sought about the view expressed by social activists that such contracts would amount to a betrayal of the people of North Chhattisgarh, since the Congress had campaigned against such contracts while in Opposition.

Baghel did not respond to the questions. This story will be updated if he does.

Chhattisgarh is a power surplus state and activists have repeatedly pointed out that the state does not have any pressing need to open fresh coal mines for its electricity generation plants.

In southern Chhattisgarh, meanwhile, the Congress government has given Adani Enterprises permission to set up mining operations in conflict-affected Dantewada. A joint venture of central and state public sector companies had awarded Adani a contract to develop and operate an iron ore mine in September 2018. The agreement was signed in the first week of December, days before the new government took charge.

The death of a forest

The Hasdeo Arand is one of central India’s last remants of biodiversity-rich forests that act as an important wildlife corridor. With coal seams running underneath, its fate has always seemed precarious.

In 2010, the environment ministry under the United Progressive Alliance government had classified it as one of nine “No-Go” areas for mining, and had rejected proposals seeking clearances to open and operate coal mines. But in 2011, environment minister Jairam Ramesh overruled an expert committee and gave clearance to mining in three blocks, which he claimed would be “the first and the last”.

Two of the blocks, Parsa East and Kanta Basan, which received environmental clearances, had been allocated by the coal ministry in 2007 to the Rajasthan Vidyut Utpadan Nigam Limited, the state power generation company, which in turn had entered into a joint venture with Adani Mining, giving the private company 74% stake.

As Caravan reported, this shareholding pattern has remained intact even after the Supreme Court judgement in 2014 cancelled all coal block allocations, including those to public sector firms, and the Centre passed a law in 2015 that restricted private ownership in such joint ventures to 26%.

Apart from Parsa East and Kanta Basan, two other blocks – Parsa and Kente Extension – were freshly allotted in 2015 to Rajasthan Vidyut Utpadan Nigam Limited. A third block in the adjacent Gare Palma coalfields – Gare Palma III – was allotted to Chhattisgarh State Power Generation Company Limited.

Adani bagged mine developer and operator contracts in all these blocks.

It also emerged as the lowest bidder for developing and operating two other blocks – Gare Palma I, allotted to Gujarat’s power generation company, and Gare Palma II, allotted to Maharashtra’s power generation company – but it is not known whether it was awarded the contracts.

On February 21, the environment ministry granted environmental clearance for mining operations in Parsa block, sparking public outrage.

Adani’s expanding footprint

If the Congress government in Chhattisgarh were to go ahead with the tender initiated by its predecessor, the Gidhmuri and Paturia coal blocks could add to Adani’s rapidly expanding coal mining portfolio.

The coal ministry had allotted the Gidhmuri and Paturia coal blocks to Chhattisgarh State Power Generation Company Limited on October 13, 2015. The state electricity company issued a notice inviting bids for the development and operation of the blocks on March 22, 2018.

Spread over 17.52 square km, the blocks would be operated as an open cast mine – which means the entire area would be dug up to excavate coal, as opposed to an underground mine which left the surface covered. The peak capacity would be 5.6 million tonne per annum, the notice said.

The last date for bid submissions was June 7, 2018.

Shukla said when the bids were opened in August 2018, Adani emerged as the lowest bidder. The bid details were placed before the board of the company, which asked for eligibility checks to be done, he said. The process of selection is not over and no agreement has been signed, he added, declining to disclose more details.

Adani contract in Dantewada

In the closing days of the Raman Singh-led BJP government, Adani Enterprises bagged a mine developer and operator contract in Dantewada in southern Chhattisgarh.

The public sector firm, the National Mineral Development Corporation, has been mining iron ore in Dantewada’s Bailadila Hills for five decades. Its joint venture with state government-owned Chhattisgarh Mineral Development Corporation, has rights to mine two iron ore blocks – Deposit-13, with an annual capacity of 10 million tonnes per annum, and Deposit-4, with an annual capacity of 7 million tonnes per annum.

On September 20, 2018, two weeks before the assembly election dates were announced, the joint venture issued a letter of award of contract to Adani Enterprises, appointing the firm as mine developer and operator for Deposit-13.

The agreement was signed on December 6, 2018. Five days later, election results were declared: the BJP was voted out of power.

On February 12, the new Congress government has furnished Adani Enterprises the “consent to establish” certificate for mining operations to extract two million tonnes of iron ore per annum.

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