Gautam Adani , Chairman Adani's Group

Gautam Adani , Chairman Adani’s Group

To meet its power requirement, the Gujarat Government had signed a deal with Adani Power Ltd. (APL) on February 6, 2006 to buy 1000 megawatts of electricity at the expensive rate of Rs. 2.89 per unit. This move is set to incur losses worth Rs. 24,000 crores and will be placed upon the people of Gujarat over the next 25 years. The pact in itself is full of serious irregularities. To remove PTC India Ltd. from the deal, the state government went to the Supreme Court. But when it did not get relief even there, it took the support of technical errors and kept PTC out of the pact. This is yet another proof of Adani and Modi’s complicity, which has already been exposed byGulail.

Also Read: Adani-Modi nexus to cost 23,625 cr

We now know how the Modi government benefited Adani in the garb of losing out to him. The first chapter of this alliance begins with the second Power Purchase Agreement (PPA) of 1000 megawatts signed between GUVNL and Adani Power Ltd. The supply of electricity in this was fixed at the rate of Rs. 2.35 per unit. This agreement took place on February 2, 2006 – four days prior to the PPA of Rs. 2.89 per unit. The intentions of the Gujarat government first came under doubt here because if the government was getting electricity at the rate of Rs 2.35 per unit, then why did it sign the PPA at the rate of Rs 2.89 per unit four days later?

The force behind this was the equation shared by Adani and Modi, which made an ordinary businessman a billionaire. The coordination between the two did not end here. The Modi government and Adani played several other games to mislead the public. Adani initially signed the 1000 megawatts PPA at the rate of Rs. 2.35 per unit but later felt that the deal was a loss. It seemed a better prospect to cancel the deal. It would have to pay some crores of rupees as compensation but it was more important to concoct a plausible reason for cancelling the deal. Here, it again needed Gujarat government’s help and Modi was ready to extend help. Together, they hatched a plan to restrict the supply of coal so that Adani could get a chance to go to the GERC (Gujarat Electricity Regulatory Commission).

The second scheme of the state government began thereafter which aimed to remove Adani from the PPA of Rs. 2.35 per unit. APL had signed an MoU with the state-owned Gujarat Mineral Development Corporation (GMDC). As per the rules of the MoU, GMDC had to supply coal to APL through the coal block (Morega 2) in Chhattisgarh, which the former had received from the Centre.

GMDC refused to provide coal to Adani. It is interesting to note that a company of Gujarat Government refused to sell coal to another company, which was responsible for producing electricity and selling it back to the Gujarat government.

Politics lay behind this move as well. The state government could go to any extent to benefit Adani. Now, when Adani wanted to get out of this PPA, he could be helped by restricting the supply of coal so that APL could get an excuse to terminate the agreement. GMDC refused to give coal to APL and Adani got the escape clause to go to GERC.

Adani had got an opportunity to terminate the PPA of selling power at the rate of Rs. 2.35 per unit because GMDC was not supplying coal. This move by Adani and Modi, however, was unsuccessful.

APL sent a notice to the state’s electrical services umbrella company Gujarat Urja Vikas Nigam Ltd. (GUVNL) on December 28, 2009, almost three years after the PPA documents were first signed on February 2, 2007. There lay a scheme behind this. The PPA was signed on February 2, 2007 but as per the agreement, Adani had to supply electricity from January 4, 2010. Just five days before the supply date, APL told GUVNL that it was terminating the agreement of electricity supply. Such a company, which terminated a contract just five days before the supply was to begin, should have been blacklisted. But the Gujarat government did nothing of the sort.

They opted for an easy way out, that is going to the GERC. If it had not taken even this step, its pilferage would have been detected; it would have been exposed and the Opposition party would have raised a hue and cry over the issue. That is why, GUVNL had to go to GERC. But here too, Adani and Modi’s move backfired.

GERC ruled in favour of GUVNL. The regulatory body said GUVNL had signed a 1000 megawatt PPA with APL in which the responsibility of arranging coal supply lay with Adani. If GMDC did not provide coal to APL, it could not be the basis of terminating the PPA because it was not mentioned in the agreement that the supply of electricity would stop after the MoU between GMDC and APL came to an end. This was a shock for both Adani and the Gujarat government which had taken this step for the benefit of the former but its scheme was rendered unsuccessful.

The next option available to APL was to appeal against the GERC order in the Appellate Tribunal For Electricity as it wanted to get out of the PPA at all costs. Once again then the process of bidding could be initiated and it could sign a new agreement for supplying electricity at higher rates.

Adani Power used this alternative and approached the Appellate Tribunal. But there too, it faced failure when the Tribunal affirmed GERC’s decision. APL filed a review petition after the order by the Appellate Tribunal but even this time, the tribunal decided in favour of GUVNL and re-affirmed that there was no error in its previous decision.


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