Never was a white elephant so white … and elephantine.
Besides their empty cries that coal from Australia is good for the poor people of India, while delivering monumental “jobs and growth” at home, the shrinking coterie of ideologues and thermal coal apostles has hit another hurdle.
Part of the push for a rail line from the Galilee Basin to Abbot point has hung on the argument that this railway will be a “common-user facility”; that is, it will not only be used to freight Adani coal but also that of GVK. GVK is a smaller Indian company, teetering on the brink of obsolescence, which apparently still harbours hopes that its Alpha coal project in the Galilee will one day be developed.
GVK Hancock is a joint venture between GVK and Gina Rinehart’s Hancock Prospecting. It is partnering with rail group Aurizon in the southern end of the Galilee Basin while Adani’s Carmichael project lies to the north.
In another blow to those who wish the Galilee to be developed with thermal coal mines, GVK Power & Infrastructure announced on Friday it had sold its remaining 10 per cent stake in Bangalore International Airport to Fairfax India Holdings for $US200 million.
It seems GVK has been reduced to selling core assets to stay afloat. Net debt is now $US1.8 billion versus a market value of equity at $US145 million.
GVK has suffered six years of losses, last reporting a net loss of $US209 million for 2017 as its auditor raised questions as to whether it was a “going concern”.
Meanwhile, Adani is still holding out for taxpayer subsidies in a bizarre negotiating process knowing full well that, in India, the cost of building new solar capacity is cheaper that new thermal coal.
Adani Power Management recently conceded that almost $US9 billion in existing thermal coal plants fired by imported coal at Mundra, Gujarat, are no longer viable. It referred to the prohibitively high costs of imported coal.
No doubt, while coal futures languish well below the spot price, rendering Adani’s hopes (if they really still harbour them without taxpayers backing the lot) futile, the Carmichael cheer-squad will gloss over these small details as somehow bad for the poor people of India while they continue to promote this most effulgent of white elephants.
It will never happen, nor should it.