AS A self-made billionaire, Gautam Adani — the man behind Australia’s most controversial mine — is used to pulling off the impossible.
Having risen from modest roots as a high-school dropout in India who once tried to make his fortune in diamonds, Mr Adani now rubs shoulders with world leaders and heads a company that rakes in $12 billion a year.
In Australia, Mr Adani is known for being the backer of the $21 billion Carmichael coalmine in Queensland’s Galilee Basin amid huge environmental opposition and falling coal prices.
He’s also the man that Australians are entrusting to deliver “thousands” of jobs in Queensland and safeguard one of the country’s most valuable assets: the Great Barrier Reef.
Queensland Premier Annastacia Palaszczuk put her faith in Mr Adani’s promises for the mine after meeting with the chairman and founder of the Adani Group last year. So much so, she spruiked a handshake deal captured in a photo with Mr Adani, even though she didn’t get it in writing.
“I have got an iron-clad guarantee from Mr Adani that there will be no 457 visa as part of the workforce for this major project,” Ms Palaszczuk confidently told reporters after the meeting.
“I secondly have a guarantee of a Queensland-first policy for jobs and especially for regional Queensland.”
But while Ms Palaszczuk had no trouble trusting Mr Adani and his handshake agreement, others are not so confident, pointing to controversy surrounding his company.
So who is the man Australia is putting so much faith in?
A married father of two, Gautam Adani is India’s 13th richest person, with a fortune valued at $6.3 billion but, unlike many uber wealthy in the country, he wasn’t born into privilege.
“I’m a school dropout. So, at the age of 16, I moved to Mumbai to try my luck on some business,” Mr Adani told the Financial Times.
The fourth of five brothers, Mr Adani dabbled briefly in the diamond trade but then returned to his home state of Gujarat to run a small plastics factory for his brother. From there he set up his own business, Adani Enterprises, to import and export commodities, and his rise has since been meteoric.
Mr Adani is known for taking big risks and his ability to push projects through — not an easy task in a country known for its bureaucratic inefficiencies.
But Mr Adani has found ways of getting around these. He has managed to deliver projects by building his own infrastructure — including Mundra, his own private port, which services the world’s largest privately held coal power station next door, which he also owns.
“He is able to do so well partly because he is very entrepreneurial and has found the right opportunity,” Eswar Prasad, an economic adviser to India’s finance minister, told The New York Times. “But it’s a symptom of a dysfunctional state. He is able to deliver something more effectively than the state.”
His success has also been linked to the rise of Indian Prime Minister Narendra Modi, once the powerful and controversial chief minister of Gujarat. Mr Adani supported Mr Modi early in his career and has benefited from various governmental approvals over the years. He also bought land along the coast at very low prices from the Gujarat government, installed infrastructure and later made a huge profit from selling parts of it.
Mr Adani’s aim to become India’s biggest private electricity provider aligns well with the government’s position. In recent years, India has turned to private companies run by people like Mr Adani to help it deliver infrastructure, banks, ports and electricity to its citizens, many of whom still don’t have access to power. But it’s raised questions about the close relationships and the possibility of crony capitalism.
“No question, there is an oligarchy developing that has an enormous amount of influence,” Arvind Subramanian, an economic adviser to the Indian government, told The New York Times. “That is a matter of great concern. But in India, these are also the guys who are performing. In some cases, they may be gaming the system, but they are also performing despite how bad the system is.”
Mr Adani’s knack for delivering projects has made him a respected business figure in India but his path has not always been smooth. He was once kidnapped and held for ransom in 1997. He was also inside the Taj Mahal Palace and Tower Hotel when it was attacked during the November 2008 terrorist attacks in Mumbai.
Mr Adani’s company has been embroiled in illegal dealings, bribery, environmental and social devastation and allegations of corruption, fraud and money laundering, according to a legal research brief released by Environmental Justice Australia in February.
In one concerning incident, a ship carrying Adani coal sank and caused an oil and coal spill along Mumbai’s coast, which damaged tourism and polluted the marine environment. A court fined Adani $975,000 for the accident.
Adani was also ordered to pay $4.8 million after constructing Hajira Port without approval, which destroyed habitat, claimed land and blocked access to fishing communities.
Last year, Adani Enterprises was named in connection with a $US4.4 billion pricing scandal and the firm has been accused of profiteering on coal imported from Indonesia. The company is being investigated by the Indian Directorate of Revenue Intelligence, but has denied being involved in overvaluing the coal.
In Australia, Adani has continued to spruik the creation of “10,000 jobs” as part of its Carmichael mine construction, with Mr Adani tweeting the figure on May 30 after a royalties agreement was reached with the Palaszczuk Government.
This is despite the company’s own economist admitting to the Land Court as part of a recent legal action, that the correct figure was in fact 1464 employee years of full-time equivalent direct and indirect jobs. Dr Jerome Fahrer told the Land Court the 10,000 figure was “extreme and unrealistic”.
The lower figure used modelling that took into account the amount of jobs created once the jobs lost in other industries like manufacturing, agriculture and from other mines was also taken into account.
While there will also be jobs created for the port expansion at Abbot Point, The Australia Institute’s Rod Campbell has pointed out that a port expansion in Newcastle wasn’t expected to create more than 80 jobs.
AUSTRALIA’S ROLE IN ADANI’S EMPIRE
Mr Adani has been hampered in developing coalmines in India so Australian coal has helped the billionaire to achieve his goal of becoming India’s biggest private power provider.
Mr Adani’s plans in 2009 to develop a coalmine in Maharashtra were blocked because of controversy around its proximity to a wildlife reserve for endangered tigers, so the magnate needed another source of coal for his nearby power plant.
Using his private port Mundra, he has been able to ship in coal from Indonesia and Australia, and has bought mining assets in both countries. In order to get this imported coal to his power plants, he even built 64 kilometres of rail line to connect Mundra port to the national network.
In 2013 Mr Adani said his goal was to double the capacity of Adani Group by 2020, but he also sees himself as a nation builder
“Money doesn’t drive me. I like challenges where you feel you are part of nation-building,” he told India Today. “I could have created many different businesses but I feel more satisfied when I create something that can be a part of the India journey.”
WILL THE CARMICHAEL MINE GO AHEAD?
Whether Mr Adani’s next big challenge can be surmounted remains to be seen.
This week, the Australian Government removed the last remaining legal hurdle to Adani’s Carmichael mine, pushing through changes to native title law covering indigenous land use agreements. But no sooner had the bill been passed than a report in The Guardian appeared, claiming one member of the Wangan and Jagalingou people who backed an agreement with Adani had now changed his mind.
The mine will also be relying on a $1 billion concessional loan funded by taxpayers to build a 389km rail line. But the Northern Australia Infrastructure Facility, which is considering the loan, has also become embroiled in controversy.
Labor has called for board member Karla Way-McPhail to be sacked because her business interests in the mining industry mean she could gain financially from decisions the facility makes.
A Senate committee will now investigate concerns about a possible conflict of interest and Greens senator Larissa Waters said she would call Adani before the inquiry to grill it on why it needs taxpayer funds.
Meanwhile, an expert told The Courier-Mail this week that Adani may not produce coal from the mine until 2023, at least two years later than the company’s forecast.
“Given the scale of the project, we have aligned Carmichael’s start date with our coal market’s export view that Galilee Basin coal will only be required by 2023,’’ senior analyst Pralabh Bhargava of global coal research company Wood Mackenzie said.
Adani said its forecasts for a 2020-21 start had not changed; Australia will be watching to see if it will deliver on its promises.
By Charis Chang
Published by News.com.au on 17 June 2017