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Will Adani Invest Big In Rajasthan Before 2023 Poll?

October 13, 2022 14:24 IST

'I clearly recall how you immediately directed your administration to identify and allocate land, water, and other clearances in the shortest time possible.'
'That was the fastest decision-making process I have ever witnessed.'

IMAGE: Rajasthan Chief Minister Ashok Gehlot, right, with Adani Group Chairman Gautam Adani at the Invest Rajasthan Summit in Jaipur, October 7, 2022. Photograph: Kind courtesy Ashok Gehlot/Twitter

The Gautam Adani-led conglomerate, soon after announcing a Rs 65,000 crore (Rs 650 billion) investment in Rajasthan at the Invest Rajasthan Summit 2022 in Jaipur, had to face the Bharatiya Janata Party's wrath.

The BJP, even when the inaugural session at the Invest Rajasthan Summit was on, was critical of Gehlot for his government's outreach to Adani.

Gehlot, on the other hand, praised Adani for choosing Rajasthan to set up the group's solar power projects with massive investment.

But the BJP's criticism of Gehlot and later Rahul Gandhi's defence of the Rajasthan chief minister may have made investors -- who had promised Rs 10.40 lakh crore investments in various sectors in the state -- cautious.

Elections to the state assembly are scheduled for November 2023. Will investors like Adani wait for the outcome of the Vidhan Sabha election to make the investments a tangible reality?

'The BJP by raking up an issue relating to Adani has done great harm to the state,' Gehlot said after the investors' summit. 'Investments always bring in employment and the BJP thus tried to see that the youth of the state remain unemployed. The BJP will have to pay the price for it.'

BJP leader Rajendra Singh Rathor -- deputy leader of the Opposition in the Rajasthan assembly -- tweeted an attack on Gehlot, stating that the Congress has a strong dislike for the Adani group, but giving it huge swathes of land for the solar park proves there has always been a difference between the Congress's views and actions.

After this, Congress MP Rahul Gandhi defended Gehlot by issuing a statement that he was not against any industrial giant, but was only critical of them 'monopolising' business.

IMAGE: Gehlot with State Industries Minister Shakuntala Rawat, Rajasthan Small Industries Corporation Chairman Rajiv Arora and others at the investors' summit. Photograph: PTI Photo

When Vasundhara Raje headed the BJP government in Rajasthan, Adani Power Limited had executed an MoU with the state government in March 2008 to set up a thermal power generation project of 1200 mw at Kawai in the Baran district and sell at least 50 per cent power in Rajasthan.

The MoU was implemented after Gehlot's Congress government came to power.

At his address at this month's investor's summit, Adani recalled, 'Honourable Chief Minister, during your previous term, when I first met you to express our interest to invest in the power sector in Rajasthan, I clearly recall how you immediately supported us and directed your administration to identify and allocate land, water, and other clearances in the shortest time possible.

'That was the fastest decision-making process I have ever witnessed -- and it was that speed that allowed us to set up the 1,320 megawatts Kawai power plant near Kota in just 36 months -- a record for India and a record for any power plant the Adani Group has built.'

According to the settlement, Adani Power was to arrange the plant and Rajasthan needed to facilitate coal provided by the central authorities or different sources.

As the state authorities couldn't source coal, Adani Power was forced to use imported coal at a huge extra cost.

Since imported coal is costly, the state tariff regulator in 2018 allowed compensatory tariffs to Adani Power.

IMAGE: Gehlot addresses the Invest Rajasthan Summit 2022. Photograph: PTI Photo

The state energy company Rajasthan Discoms challenged this decision before the Appellate Tribunal for Electricity, which upheld the state regulator's order.

The matter finally moved to the Supreme Court, which settled the case in favour of the provider.

The apex court ordered the state government to reimburse Adani Power Rs 3,000 crore (Rs 30 billion) with interest which the state government paid.

The Congress government did not contest the case in the apex court.

Not contesting the case strongly and allowing Adani to enjoy an edge over the state government's plea was taken as a hidden favour granted by the Gehlot government.

The Rajasthan government paid him Rs 3,000 crore after the apex court order.

Adani's romance with Rajasthan became stronger and stronger and he decided to invest in solar power and also wind power projects in the state.

After signing an agreement, Adani Renewable Energy Park Rajasthan Ltd (AREPRL) was allotted 1,452 bighas of land near Pokhran in the Jaisalmer region in June 2021 to build solar and wind power plants.

But the Rajasthan high court, in a blow to AREPRL, ordered the cancellation of a public utility land allotment of 1,452 bighas.

In 2018, AREPRL was given 6,115 hectares of land in Nedan village, near Pokhran in the Jaisalmer region, to build a power plant.

Justices Sangeet Lodha and Rameshwar Vyas of the Rajasthan high court's division bench further ordered the state government to conduct a survey of the land parcels allocated to AREPRL and Essel Surya Urja Company in three villages.

It also directed that if any part of these lands is found to have been given to any private utility, the allocation must be cancelled.

The court issued these orders in response to a petition filed by Barkat Khan and 23 others, who were protesting the state government's allocation of public utility land to solar-generating corporations.

IMAGE: Gehlot and Minister Shakuntala Rawat at the Invest Rajasthan Summit 2022. Photograph: PTI Photo

The high court also ruled that the state government must also review the assignment of land bordering the petitioners' properties, the holdings of other khatedar tenants, and the property of public utilities.

This will be done to ensure that their rights are not infringed upon as a result of ESUCRL and AREPRL receiving land allotments.

The court ordered that the land for the approach road to the khatedar renters' lands and the hamlets of the village's residents be set aside and recorded in the tax records for the purpose.

The court further stated that the state government must conduct the entire exercise in accordance with this decision within six weeks of receiving a certified copy of the order.

After this, the state government gave AREPRL 6,115 hectares of land in Nedan village, near Pokhran in the Jaisalmer region, to build a power plant.

This was done with the chief minister's intervention as Adani Renewable Power threatened to cancel its agreement citing the government's failure to provide the land.

In the meantime, the Adani group completed the acquisition of Ambuja Cements and ACC Ltd and has become the country's second-largest cement player.

'A significant part of our capacity expansion will continue to happen in Rajasthan,' Adani state, adding, 'We anticipate investing another Rs 7,000 crore (Rs 70 billion) to double our cement manufacturing capacity in the state."

IMAGE: Gautam Adani lights a diya at the inaugration of the Invest Rajasthan Summit 2022 as Ashok Gehlot and Shakuntala Rawat look on. Photograph: Ashok Gehlot/Twitter

Adani has various projects at various stages of execution, including expanding Jaipur airport, developing networks to supply PNG and CNG, accelerating cleaner fuel availability to consumers and new transmission projects to move the renewable power being generated.

Combining all ongoing and future investments, Adani plans to invest an additional Rs 65,000 crore (Rs 650 billion) in Rajasthan over the next 5 to 7 years and create over 40,000 direct and indirect jobs.

Gehlot feels Adani's promises of investment -- in addition to Tata Power's Rs 20,000 crore (Rs 200 billion)) promised investment -- enables the chief minister to go to the polls next year with high hopes.

It is unlikely though that Adani will actually invest any more than what he has already done till after the outcome of next year's Vidhan Sabha election.

Feature presentation: Aslam Hunani/