The Godda plant is being built, but at what cost?

INDIA'S INVOLVEMENT IN ADANI’S CRAZIEST COAL PROJECT.

19th January, 2021

Written by Amatullah Batterywala

Artwork by Purvi Rajpuria

Any self-serving businessman with even average foresight would be able to gauge the decreasing dependency and the appeal of coal in today’s time and age. With greater pressure from environmental activists and the looming changes due to differing carbon policies of countries, coal is seen as a less than viable investment by many corporations. 

 

However, the Adani Carmichael Coal Project, which has been marred with controversy can’t seem to take the hint. 

 

Chairman Gautam Adani's Adani Group, has been involved in a number of climate crimes over the years. Of late, he is caught up in an “illegal” and “unnecessary” mega-port project in Pulicat, Tamil Nadu. The huge breakwaters he constructed at Kerala’s port are the reason for the destruction of its beaches (by coastal erosion). Even the #SaveMollem protesters have been protesting Adani because of how his coal energy ventures will benefit from Goa becoming a coal hub.

 

The Carmichael Project, however, is the “most insane energy project in the world” today. 

 

The controversy which shot to the front when protestors came barging in on the field during the Indian-Australian test series (which saw its own share of problems) has raised several questions about the feasibility of this project in the first place.

The Carmichael Project, however, is the “most insane energy project in the world” today. 

Background

 

The Carmichael mine was purchased by the Adani group’s Adani Mining Private Limited in 2010. However, it didn’t receive proper clearances until 2016. By then, the economic profitability of coal had drastically fallen. Subsequently, many investors and banks retracted their support to the program with Samsung Enterprises being one of the most recent 

ones.

 

According to the plan, the coal from the mine was to be transported to India where it would be processed in the Godda coal plant in Jharkhand. The conglomerate has already signed an MoU with Bangladesh to provide electricity for 25 years.

 

While the effects of mining coal and its subsequent transportation to India through the Great Barrier Reef (the world’s most important coral habitat) have raised a lot of objections and found considerable media coverage, one thing has been forgotten. What about India?

The Indian story

 

The Godda power station in Jharkhand is where the imported coal from Australia will be used to generate and supply electricity to neighbouring Bangladesh. There are many problematic aspects in this plant.

 

The already existing coal mine at Jitpur, Jharkhand is much closer to Godda. However, the coal from that mine cannot be used at the Godda plant because the electricity generated from it cannot legally be exported out of the country. 

Therefore, the Adani group is relying on the Carmichael mine to supply the coal needed to generate electricity at the Godda plant. So what happens to the coal mined at Jitpur?

 

That coal travels 2000 km away from the mine, to Gujarat, where it is used at the Mundra power plant. The plant is responsible for supplying energy to the state. However, currently, that plant is also going through financial trouble. This has resulted in reduced output to the extent where it is not even able to supply electricity to Gujarat which is one of its major consumers.

How is Adani building the coal plant in Godda?

 

The matter of acquisition of land for the Godda coal plant is another very distressing matter. The land in Godda belongs to Adivasi tribes and villages. The villagers have accused the Adani group of forcefully taking their land away and not giving any compensation.

 

The villagers have alleged that they were threatened by the police. They were also not allowed to take part in the public discussion which was held by the energy company and were subjected to lathi charge at the event followed by firing.

 

This is a blatant violation of human rights where the land which is the sustaining force of the tribes is being taken away. Additionally, people who have dared to fight for their rights have either been threatened, beaten up or charged with criminal trespassing. 

 

Moreover, these villages will not even benefit from the electricity that is produced here but will have to bear the brunt of environmental problems that this power plant will produce. The area already experiences water shortages which will be aggravated due to the high requirement that coal run power plants have.      

The Curious Role of the Indian Government

 

The current government in 2019, days before the announcement of election dates, took steps to declare this zone as a Special Economic Zone (SEZ). This begs discussion for several reasons.

 

First, the power project is the first of its kind stand-alone project in an SEZ. According to the guidelines of 2016, SEZs were banned from having standalone projects inside a Special Economic Zone. 

 

However, these guidelines were amended in 2019 and a month later the status was granted to the power project. Interestingly, the group had given the same proposal in 2018 which was rejected due to its incompatibility with the earlier guidelines.

 

The SEZs certification comes as a relief to the finance-stripped company because companies operating inside SEZs are exempted from many taxes and receive a bunch of other benefits. 

Aside from being the first standalone project in an SEZ, the Adani group is the first private company who has been given the clearance for exporting electricity. 

 

Another player in this controversy is the State Bank of India. They have been one of the focal points in the #StopAdani protest. The public sector bank had signed an MoU with the conglomerate to extend a $1 billion dollar loan for their Australian project. However, the loan was never extended after a political controversy. 

Reports of the bank extending the amount have erupted again recently. While there has been no clear statement by the bank, it’s overseas investors including BlackRock, Amundi and Storebrand ASA have warned SBI against the loan. 

 

This brings us to the most burning question. Who benefits?

 

Well, as things look right now, apparently no one. 

The Carmichael coal mine is going to greatly damage the land as well as the environment around it. There have been reports of several indigenous tribes being uprooted to clear the way for this mine. Additionally, there are estimates of damage to marine habitats as well as the Great Barrier Reef (they fall in the path of the Queensland port and the Odisha Port between which the coal will be transported).

 

It’s not the villagers in Jharkhand who have lost their land and livelihood to a project that will benefit. They are the ones who will bear the brunt.

 

Bangladesh is paying 2-3 times the amount of electricity. Additionally, they will also be bearing the cost of transportation as well as the price fluctuations of coal. 

 

Lastly, the conglomerate has run into numerous financial and political barriers due to environmental concerns and the changing energy landscape. This is all before they hit a roadblock in the form of COVID-19 induced lockdowns and labour cuts. 

 

So again, I ask - who is hurting? Who benefits? 

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