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Gujarat Urja Vikas Nigam Limited gave away Rs 3,900 crore to Gautam Adani: Congress questions the inaction by the Gujarat Government

Congress claims Adani violated the Power Purchase Agreement (PPA) and used his shell companies to bank Rs 3,900 crore from Gujarat state treasury over five years.

On August 26th, Gujarat Congress President Shaktisinh Gohil cornered the BJP Government in Gujarat with an allegation of facilitating Gautam Adani to “scam” a public power enterprise Gujarat Urja Vikas Nigam Limited (GUVNL) of Rs 3900 crores.

Adani, who is a close acquaintance of PM Modi and one of the most affluent individuals in India, has emerged as a target for the opposition for his alleged ‘nexus’ to the BJP High command and his disproportionate increase in wealth since BJP came to power in 2014. All these shady turns of events have fetched him the title: “The Crony Capitalist of Modi’s India.”

Gohil made such profound allegations based on a letter directed by the GUVNL to Adani Power Mundra Limited (APML), where the GUVNL wrote that it got duped into paying an excess of Rs 3,900 crores to Adani’s company, as the latter had failed to comply with the Power Purchase Agreement (PPA) signed by both parties in 2018.

The PPA signed between GUVNL and Adani:

Gohil mentioned that despite the clarity of the clauses mentioned in the PPA, Gautam Adani violated them, and there was a “loot of public money” under the nose of the Gujarat Government. 

As per the agreement, the energy charges debited to Adani were to be based on the prices of coal procured by the APML from Indonesia in scrutiny with the international prices published by an agency named Argus. 

Argus (formerly known as Petroleum Argus Limited) is an international organisation that provides price information, consultancy services, conferences, market data and business intelligence on the purchase of global petroleum, natural gas, coal industries, and other conventional energy resources.

The clauses clearly state that Adani was required to submit documents regarding ‘purchasing invoice,’ ‘competitive bids,’ and other necessary documents to augment the transparency of his coal imports. On the virtue of these bills, the GUVNL would either:

  • Credit the entire amount of coal imports if the price was lower than what Argus would publish;
  • Not credit an extra penny if the import prices exceed Argus’ limit.  

Adani did not submit a single invoice over his coal imports for the past five years, and the Gujarat Government did not bother to probe:

Congress leader Sohil revealed how Gautam Adani glaringly breached the PPA since 2018 by not presenting any bill or a document to certify the transparency of the prices of coal imported by his company.

On top of that, Adani purchased coal at exorbitant rates from selected people despite cheaper prices available elsewhere. Sohil claimed, “It is categorically mentioned that Adani Power was buying coal from a select few spot suppliers at a premium price, while the actual market price was substantially lower.” Congress alleges this was a ploy to enhance Adani’s wealth through his “shell companies” based abroad. 

While all this was taking place, not once did the Gujarat Government bother to inspect how the taxpayer’s money got spent in such a reckless manner. 

The letter sent by GUVNL mentions:

  • Over the past five years, the GUVNL had credited Adani Rs 13,802 crores as energy charges (despite Adani not submitting any invoice to substantiate his imports);
  • Finally, after corroborating with the prices mentioned by Argus, GUVNL inferred that the energy prices should not have exceeded Rs 9,902 crores. 

Instead of dragging him to the tribunals, GUVNL meekly demanded Adani refund the excess of Rs 3,900 crores ascribed to him over the past five years.

The letter issued by the General Manager of GUVNL, J Gandhi, reads: “Taking into consideration the above and in view of the fact that excess payment has been received by Adani Power Mundra Ltd from GUVNL for energy invoices for the period of October 2018 onwards, pending the final approval of base rate by the Government of Gujarat, the Adani Power is hereby requested to immediately refund the excess amount received towards energy charges.”

Congress claimed that the matter got brought out to the public because the concerned bureaucrats were fearful about losing their jobs following the Hindenburg Report and the setting up of a Committee by the Supreme Court to investigate Adani’s disproportionate increase in wealth. 

Congress raises pertinent questions for the BJP Government:

Pawan Khera, another Congress spokesperson, targeted the ethical integrity of the incumbent government via three questions:

  • Will Union Government-run agencies like the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) knock on Adani’s door with the same zeal as they exercised against the opposition leaders?
  • Is the Government of Gujarat serious in prosecuting the “loot of Rs 3,900 crores” from the Gujarati state treasury?
  • Why has not the GUVNL demanded “interest” from Adani for the immense sum of public money given away from the state treasury that otherwise could have been invested in building crucial infrastructural projects?

The Modi government’s silence on these questions will only invigorate the claims of “Modi-Adani bonhomie.”

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