Interview: Paranjoy Guha Thakurta
'Godda deal has thrown Bangladesh into a quandary'
Now Bangladesh too has been brought up in the worldwide discussions about Indian billionaire industrialist Gautum Adani's proximity with Prime Minister Narendra Modi. Adani Power has signed a deal to supply electricity from Jharkand state to close neighbour Bangladesh. The deal has thrown Bangladesh into a quandary. It is alleged that they will have to purchase the power for a three times higher price. Journalist Paranjoy Guha Thakurta talks to Prothom Alo's Delhi Correspondent Saumya Bandyopadhyay about this power deal. This is the concluding part of the two-part interview.
You have said that no one will benefit from that deal other than Adani. Bangladesh is squirming in discomfort and looking for a way out. They seem to have bitten off more than they can chew.
This deal has generated a lot of interest not just in India and Bangladesh, but worldwide too. A lot is being written about it. You will have to go back a bit to understand the context. It was 2015 and India's 'Look East' policy had become 'Act East'. Prime Minister Narendra Modi chose Bangladesh as its first neighbour. He paid a two-day visit to the country in June. He held a meeting with Bangladesh's prime minister Sheikh Hasina. The joint press statement of the two countries declared that there was a lot more for India and Bangladesh to do in the power sector.
And then the power deal was signed?
Exactly. An agreement was signed between Bangladesh Power Development Board (BPDP) and Adani Power (Jharkand) Limited, which came to be known as the Godda deal. The Adanis were to supply electricity from the Godda project in the Indian state of Jharkand. As time progressed, so did controversies, both home and abroad. Now the legality of the deal is being questioned the world over.
Could you explain why?
Sure. But first let me say, this Godda project is really something quite new. I doubt if there is any such project anywhere else in the world. You know, the coal for this project will come from the Adani mines in Australia or Indonesia. It will be transported by sea to the Dhamra port in Odisha. That port too is run by Adani. That coal will then be transported by train to Godda in Jharkand. The electricity generated there at the Adani project will then be taken across West Bengal into Bangladesh. I doubt if there is any such project like this anywhere else in the world.
In short, this is not just intercontinental power marketing, but interstate and inter-country too.
You are right. Jharkand was under BJP rule at the time. Raghubar Das had been the chief minister. The Adani company asked him for 2000 acres of land in Godda district for this project. The media was rife with detailed reports on how that land was acquired, how regulations were changed, muscle power was exerted, cases were filed to crush any movement, unwarranted arrests were made, and how poor people's livelihoods were snatched away. Just imagine, the river water there would be used to produce electricity, but the local people would not benefit in any way. Electricity would be produced on their land, but they would not receive any electricity. It would go to another country.
There is considerable discontent over the matter in Bangladesh too. Questions are being asked, innumerable questions are being raised.
It has been quite shocking! Let's go back a bit once more. When the Adanis decided to extract coal from the Carmichael mines in Australia, various groups and environmentalists had protested. Australian MP Bob Brown was the leader of the Green Party there. A movement arose against the controversial activities of Adani's various companies. There was a lot of reporting about this in the media too. Bob Brown opened a website in this regard. That was 2019 and the site was called 'Adani Watch'. As I sit talking to Prothom Alo today (9 February), a lengthy report has been posted on the 'Adani Watch' site. They point out that Bangladesh will have to purchase power from Godda at three times the price. Bangladesh has realised this too. In a dilemma, BPDB now wants to draw up a fresh contract. Bangladesh will be having to buy power from Adani at costs much higher than from any other Indian company or power produced in the country itself. It is not known what the consequences will be. The Adanis have reportedly said Bangladesh wants some temporary respite.
Has it been made clear, what is actually happening about the deal?
That is the surprising matter! You will see from the very start how the Adanis got everything they asked for. The Modi government has made new rules for them, changed old rules for them. In 2016 the Indian power ministry stated in its cross-border trade regulations that other than state-owned companies, any coal-fired power project would require permission to supply 'surplus' electricity to a neighbouring country. In order words, 'extra' electricity could be exported with permission. There was no mention of supplying surplus power to Bangladesh in the sub-contract. That very year, the Jharkand government changed another rule. The old regulation maintained that the power producing company would have to provide 25 per cent of electricity within the state itself. That regulation was changed and Adani was given permission to export 100 per cent of the electricity to Bangladesh! Environmental activists filed a case. The National Green Tribunal dismissed the case, saying that it hadn't been filed within 30 days of the project approval. Also the petitioner was not an injured party and so did not have the right to bring about charges. In 2019, the Modi government also changed the Special Economic Zone (SEZ) regulations. Just three years previously the Modi government itself had made a rule that there could not be only one single power plant in any SEZ. But with the change of the regulations, Adani's Godda project became the only industry in that SEZ.
That means Adani Power received all the special facilities of the Special Power Zone?
Just imagine how massive these facilities were. They would not have to pay any import duty on the coal and machinery they brought it. They received a 100 per cent exemption for the first five years and 50 per cent for the next five years. Adani Power would save at least 320 crore rupees a year as Clean Energy Cess. Simply because of being in the SEZ, they would make 8000 crore rupees in 25 years, the tenure of the agreement.
That is why the opposition is bringing about allegations of crony capitalism. In the parliament too, it is being said that Adani is the apple of Modi's eye! The law, the government, everything is for him!
Adani does not admit this. In a recent interview with a Hindi TV channel, Gautam Adani said, "No one can ever extract personal favours from Modi ji. You can discuss national interest policies with him. But when the policy is made, it is for everyone, not for the Adani Group alone."
Even after Adani Group gets so much facilities and benefits, why will Bangladesh have to buy the electricity at such an exorbitant price?
That is exactly the question raised by 'Adani Watch'! Journalist Ravi Nayyar and his colleague have raised these issues in detail in their lengthy report published in 'Adani Watch'. They have even questioned the legality of the deal. In February 2019, that is, 15 months after the power purchase agreement (PPA) was signed, the Godda project was declared to be an SEZ project. They saved a huge amount of money by this. They saved crores and crores of rupees due to the tax exemption. Was Bangladesh informed at the time of signing the deal that Goods and Services Tax (GST) was supposed to replace VAT and other taxes? Or about the facilities to be received as the project received SEZ status? If they were not informed about all this, BPDB can certainly claim that the contract has been violated. 'Adani Watch' had raised these questions before the BPDB chairman Mahbubur Rahman, but received no reply! There is another factor that makes matters even worse. According to the deal, all the bills must be paid to Adani in US dollars. At the time that the deal was signed, the exchange rate had been USD 1 = Tk 81.19. That now stands at Tk 104! Just look how the Godda project has thrown Bangladesh into a quandary.
If this knot is not sorted out, won't it impact India-Bangladesh relations?
It certainly can. Unless there is a fair and acceptable solution to this problem, both sides can go to the international court. I do not know if that will happen, I cannot foretell the future. My personal opinion is that, the project hasn't been completed as yet due to a number of reasons. That is why many are doubtful that Bangladesh will begin to receive this electricity from 26 March, its Independence Day. 'Adani Watch' has studied the contract in detail and asks why Bangladesh should pay three taka for something that costs one taka? Bangladesh's consumers, the general people, the government, no one will benefit. The poor people of Godda will certainly not benefit either. Who stands the gain then? Everyone knows the answer.
If Bangladesh is forced to buy electricity at additional costs, will this deal not instigate the anti-Indian forces in Bangladesh?
I do not know the answer to this question. Economy and politics have merged here. I have no idea how this deal will be viewed by the opposition in Bangladesh, the general people, the civil society and the government, and how they will react.
The Hindenburg Research report has defamed Adani. His empire has been shaken. It is bleeding. Is legal action their only way out?
That is what Adani's initial response seemed to indicate. They said they would file a case. Let's see if they actually do so. Hindenburg has welcomed them, told them to go ahead and file a case. That means more information will surface. Adani is now trying to handle the matter politically, using the nationalist card. Conspiracy theories are being hatched. Journalists like me, intellectuals, activists and all who have raised questions about the Modi-Adani nexus, are all being painted as 'traitors'.
Is it not essential, in the interests of both India and Bangladesh, to resolve the Godda quandary?
Definitely. There is still time. Many things can be done. In my personal opinion, this project will simply benefit one private company. I do not believe that either Bangladesh or India will benefit in the least. The 'Adani Watch' report has consolidated that belief.
* This interview appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir