Forest Land Given to Adani Firm Wrongly Classified, Costs Gujarat Govt Rs 58 Cr

PAC noted “undue” benefit of Rs 58.64 crore due to inappropriate classification of land, citing a CAG audit report.

The inappropriate classification of forest land transferred to Adani Chemicals in Kutch for Mundra Port and SEZ by Gujarat’s forest and environment department led to the company paying Rs 58.64 crore less to the state government, The Indian Express has reported.

The discrepancy came to light when the Public Accounts Committee (PAC) tabled its fifth report before the Gujarat Assembly on Wednesday, 21 September.

In its report, PAC, headed by Congress MLA Punja Vansh noted “undue” benefit of Rs 58.64 crore due to inappropriate classification of land, citing an audit report of the Comptroller and Auditor General of India (CAG).

According to the PAC report, the Central government had given an in-principle approval to Adani Chemicals Ltd for the allocation of 1,840 hectares and 168.42 hectares of land in Mundra and Dhrab villages respectively of Kutch district.   

However, a new proposal was presented to the Centre in January 2009, the approval for which came within a month.

Meanwhile, the Supreme Court had, in a judgment dates 28 March 2008, classified the forests of India in six categories and also fixed their net present value (NPV). According to the same judgment, the ones in Kutch were classified under Eco Class II (with NPV of Rs 7.30 lakh per hectare) and Eco Class IV (with NPV of Rs 4.30 lakh per hectare).

In December 2008, the Conservator of Forests, Bhuj, had identified the land in question as a mudflat and, in his inspection report, observed that the creek was full of mangroves.

Despite this, the PAC report claims, the Deputy Conservator of Forest (Kutch East) had considered the land in question to be falling under the Eco Class IV category and accordingly, recovered Rs 87.97 crore as NPV for the total 2008.42 hectare of forest land allotted to the company.

Furthermore, the PAC committee noted that the state forest department, in a written reply to the committee, had submitted that the land in question indeed falls under the Eco Class IV category.

The committee believes that instead of recovering NPV as per Eco Class II from Messrs Adani for the change of purpose of forest land for Mundra Port and SEZ, the department has recovered NPV as per Eco Class IV. This decision of the department has resulted in Rs 58.67 crore less recovery to the government.

Public Accounts Committee (PAC) Report

PAC has now sought to recover NPV as per Eco Class II from the company within three months, and recommended that action be taken against officials responsible for the inappropriate classification of land.