The Prime Minister’s single-minded focus on enriching his close friends is once again in evidence, this time in coal mining. Reversing a longstanding policy of competitive auctions for coal block allocations, the Modi government has allocated lucrative coal blocks to Adani even when in cases where it was either the sole bidder or in which a related party acted as the second bidder in a thinly-disguised collusion to violate the spirit of the Supreme Court’s orders on coal auctions.

Since the Modi government has begun awarding coal blocks for commercial mining (as opposed to captive mining), the Adani Group has won seven coal blocks through “bidding” in auctions. According to the publication Adani Watch, in 2022 the Group as awarded the GondbaheraUjheni East coal block in Madhya Pradesh despite it being the sole bidder in the so-called auction. The mine had been one of several that failed to find more than one bidder when originally auctioned in 2021.

However an Empowered Committee of Secretaries (ECoS) set up during the peak of the Covid lockdown in May 2020 had conveniently been empowered to allocate coal blocks that had single bidders the second time they were auctioned. When the GondbaheraUjheni East block was offered once again for auction, the ECoS awarded it to the single bidder an Adani Group firm. The ECoS decision came despite the recommendation of an earlier expert committee that any auction with less than three bidders be annulled.

As previously reported by the publication Scroll, three other coal blocks have been awarded to Adani despite serious allegations of collusion amongst the bidders. In two blocks, North West of Madheri and GondbaheraUjheni, the Adani Group “bid” against a firm called Cavill Mining that was registered in April 2022, has a paid up capital of Rs 1 lakh and no mining experience. Cavill is owned by the main promoter of Adicorp, reportedly a longstanding friend of Gautam Adani’s.

Adicorp Enterprises is a small Ahmedabad-based firm with revenues of only Rs 64 crore that borrowed Rs 622 crore from four Adani Group firms and loaned Rs 609 crore to Adani Power in 2019-20. On 29 January 2023, the Adani Group claimed that Adicorp was not a related party.

Adani and Cavill were the sole bidders for North West of Madheri. The Gujarat Mineral Development Corporation also bid for GondbaheraUjheni but how vulnerable to the PM’s pressure the public sector unit may be is anyone’s guess.

In the Purunga coal block, the second bidder was a construction firm that received Rs 6,000 crore of orders from Adani in 2022, which seems unlikely to incentivize a competitive bid. This is exactly the “bid rigging” that the CAG highlighted in its audit of earlier coal auctions, and why the rules governing bidding by subsidiaries and joint ventures were tightened after 2015. Instead of trying to prevent this, the Modi government has facilitated the Adani Group’s strategy of acquiring lucrative coal blocks by using proxies to create the appearance of competition in coal auctions. And where it is unable to find a related-party willing to bid, the PM will ensure that the block goes to Adani in complete violation of the spirit of the Supreme Court coal judgement. It is no coincidence that the blocks awarded to Adani in this manner had the lowest winning revenue-share of all the awarded coal blocks, making the PM’s close friend the prime beneficiary of the government’s commercial coal mining policy.

This is yet another sordid episode in the PM’s quest to create one Modi-made Monopoly (3M) after another at the cost of Indian consumers and taxpayers. And one more reason why only a JPC will be able to unravel the truth about the Adani Mega Scam. Tuesday, November 7, 2023