Adani slashes its Maharashtra power project cost by 99%, its forest dues plummet; Centre orders probe

Why in the News

A wildlife conservation deposit tied to project cost has fallen from Rs 227 crore to about Rs 2.27 crore, after the cost of Adani Green Energy‘s Tarali Pumped Storage Project in Satara, Maharashtra, was revised from Rs 5,675 crore to Rs 56.75 crore. The Ministry of Environment, Forest and Climate Change (MoEFCC) has directed the State forest department to investigate on priority. The case tests who checks a cost figure that sets conservation dues.

What is the project, and why does it owe a conservation deposit?

1. What it is: The 1,500 megawatt project is proposed on the Tarali dam reservoir in Patan taluka. Pumped storage moves the same water between two reservoirs, working like a rechargeable battery for the grid.
2. Land: It covers 150.74 hectares of non forest land in Nivade, Tondoshi, Kalambe and Jalu villages.
3. Deemed Eco-Sensitive Zone: The project lies in the deemed Eco-Sensitive Zone (ESZ), a protective buffer, around Koyna Wildlife Sanctuary in the Sahyadri Tiger Reserve (STR). Koyna’s ESZ is not notified, so Supreme Court directions treat a 10 km radius as one.
4. Why a deposit: Under existing norms, private companies setting up projects in an ESZ are asked to deposit up to 4% of project cost for forest conservation and protection.
5. The takeaway: The deposit moves with the stated project cost, so that one figure decides how much conservation money the tiger reserve gets.

How did the deposit shrink?

1. Environment Clearance: MoEFCC’s letter recommending prior Environment Clearance, the environmental approval needed before construction, put the project cost at Rs 5,675 crore in February 2025.
2. State Board for Wildlife: In February 2026, the Board laid down 15 conditions, including the conservation deposit into the STR’s bank account.
3. First demand: The State’s Principal Chief Conservator of Forests (Wildlife) then asked the company to deposit Rs 227 crore.
4. Revised cost: In a notarised affidavit on September 8, the company stated the cost as Rs 56.75 crore, saying it was “based on analogous estimation“, meaning a cost estimated from similar projects.
5. Acceptance: On October 12, the forest department accepted the affidavit. Part of the deposit is due now and the rest after the National Board for Wildlife (NBWL) clears the project.

Who has objected, and what has the Centre done?

1. Complaint: The Honorary Wildlife Warden of Satara district complained on October 30 of an “incorrect cost of the project”, through the Prime Minister’s grievance portal and the State’s Aaple Sarkar portal.
2. Complainant’s case: The warden says the department accepted a cost 100 times lower than the actual estimate, an undue concession of about Rs 225 crore.
3. Centre’s direction: On November 6, MoEFCC called wildlife protection primarily the State’s responsibility and asked for an investigation on priority.
4. State inquiries: The State forest department has begun its own probe, and the Deputy Director of Koyna Wildlife Sanctuary has been asked to inquire.
5. Company’s stand: The Adani Group said the project is on private land with no forest land and does not harm downstream ecology. It did not address the revised cost.

Challenges

1. Unverified affidavits: The forest department accepted a stated cost without checking it against the Centre’s own Environment Clearance letter.
2. Unnotified ESZ: Koyna’s ESZ is only deemed, so the deposit rests on a court direction, not a notified boundary.
3. Split accountability: Central clearance and State wildlife checks run separately, so each can assume the other verified the cost.

Way Forward

1. Cost from clearance records: Forest departments should compute ESZ deposits from the cost recorded in the Environment Clearance, not from later affidavits.
2. Audited revisions: A large cut in stated cost should need an audited estimate before acceptance.
3. Koyna ESZ notification: MoEFCC and Maharashtra should finalise the ESZ notification for Koyna Wildlife Sanctuary.

Conclusion

The conservation deposit now rests on a revised cost that State inquiries, ordered at the Centre’s direction, are examining. The probe findings and the NBWL standing committee’s decision are the next milestones.

Key numbers

1. Paid into the STR’s account: Rs 56.75 lakh, 1% of the revised cost.
2. Balance due after NBWL clearance: Rs 1.7075 crore, 3% of the revised cost.

Back2Basics: Sahyadri Tiger Reserve

1. Location: It is spread over the Satara, Sangli, Kolhapur and Ratnagiri districts of Maharashtra.
2. Protected areas: It covers Koyna Wildlife Sanctuary and Chandoli National Park, and includes the Shivsagar (Koyna) and Vasant Sagar (Warana) reservoirs.
3. Significance: It is the northernmost tiger habitat in the Western Ghats.

Matching Previous Year Question

“[2024, GS3, 10 marks] What role do environmental NGOs and activists play in influencing Environmental Impact Assessment (EIA) outcomes for major projects in India? Cite four examples with all important details.”