The Bihar government’s decision to lease 1,050 acres of land to the Adani Group for a thermal power plant has ignited protests and political disputes. The project, located in Bhagalpur’s Pirpainti area, is a major investment aimed at boosting energy production. However, opposition parties and environmentalists have raised concerns about the terms and impact of the deal.
Overview of the Pirpainti Thermal Power Project
The Pirpainti Thermal Power Plant is a 2400-MW coal-fired project by Adani Power Limited. It involves three units of 800 MW each. The investment is approximately $3 billion, making it Bihar’s largest private sector investment. The project promises to create 10,000-12,000 construction jobs and about 3,000 permanent operational roles. It aims to enhance Bihar’s power supply and energy security.
Congress Allegations Against the Land Lease
The Congress party alleges that the Bihar government has leased fertile agricultural land to Adani at a token rate of Rs 1 per year for 33 years. They claim this amounts to a gift and accuse the government of mortgaging Bihar’s future. Environmental concerns focus on the cutting of around 10 lakh trees. Congress also criticises the power tariff, which is Rs 6.075 per unit in Bihar, higher than in some other states.
Government’s Defence and Transparency Claims
Bihar Industries Minister Nitish Mishra rejects the allegations. He states the project was awarded through a transparent tariff-based competitive bidding process under the Electricity Act. The land was leased to the Bihar State Power Generation Company before Adani won the bid. The Rs 1 lease rate is part of a policy to reduce power generation costs. Land ownership remains with the Bihar government’s Energy Department.
Land Lease Policy Context
The Rs 1 per year lease is not unique to Adani. The Bihar Industrial Investment Promotion Package 2025 offers similar concessions to qualifying investors. Under this policy, investors with substantial investments and job creation targets receive free or discounted land. This policy is valid until March 31, 2026, and aims to attract industrial development.
Environmental Impact and Mitigation Measures
Though 10,055 trees were counted on the land, only those in the plant and coal handling areas will be cut. These areas cover about 300 acres. The government promises afforestation on 100 acres as compensation. Most of the trees were planted after 2010-11, suggesting a relatively young green cover.
Cost of Thermal Power Versus Renewable Energy
Thermal power costs more due to its constant availability. Renewable energy rates are lower but suffer from variability caused by weather and time of day. Solar and wind power have capacity utilisation factors of 22% and 32% respectively. Thermal power’s reliability justifies its higher tariff.
Similar Controversies in Other States
Adani’s land acquisitions for power projects have faced opposition elsewhere. In Jharkhand’s Godda district, farmers protested alleged forced acquisitions and intimidation. The state government formed a panel to investigate these claims in 2025. Such controversies reflect wider challenges in balancing development and local rights.
Political Implications Ahead of Elections
The controversy has intensified ahead of the Bihar Assembly elections. Congress accuses the ruling BJP of favouring Adani during electoral challenges. BJP counters by saying the land is leased, not sold, and accuses Congress of obstructing development. The debate marks the politicisation of industrial projects.
Details of Land Acquisition and Compensation
Land acquisition affected 919 private landowners across five villages. Compensation varied based on land type, trees, and structures. Valuations were conducted by forest and building officials. Payments followed both the 1894 and 2013 Land Acquisition Acts, resulting in some landowners receiving higher final payments. The one project, one rate principle applied, but rates differed for agricultural and barren land.
Questions for UPSC:
- Discuss in the light of India’s industrial policy how land acquisition for large projects impacts local communities and environment.
- Critically examine the role of public-private partnerships in India’s energy sector development with suitable examples.
- Explain the challenges of balancing economic development and environmental sustainability in India’s thermal power projects.
- With suitable examples, discuss the political economy of infrastructure projects and its influence on electoral politics in India.
