PIL in Supreme Court against DVC-NVVN power supply to Bangladesh

Joshi alleges that domestic coal as well as the country's hydel resources cannot be used to generate power for exports

Even as the Damodar Valley Corporation (DVC), along with its partner NTPC Vidyut Vyapar Nigam (NVVN), is gearing itself to supply power to Bangladesh, where it recently won a supply contract of 300 megawatt (Mw) of power for a 15-year time period, both are headed to be drawn into a legal battle on the same.

Piyush Joshi, partner with law firm, Clarus Law Associates, has recently filed a public interest litigation (PIL) in the Supreme Court against both these firms, challenging the legalities involved in the bidding process.

According to Joshi, who is also an energy practitioner and advises companies on their energy requirements, DVC’s submission of bid for sale of electricity to Bangladesh is void as it is a statutory corporation regulated by the DVC Act, 1948, and cannot sell electricity outside the designated area of Damodar Valley, which comprises the states of West Bengal and Jharkhand, according to Section 1(2) of the said Act.

“In case it wants to supply power to other areas, permission from the government would be needed but it cannot be for exports,” Joshi alleged.

The PIL states it is “against public interest and the interests of India  that a(n) interstate statutory corporation, namely DVC, which is a corporation created and regulated by the DVC Act, 1948, (last amended in 2011) that is co-owned by the central government and the states of West Bengal and Jharkhand through the trading company NVVN, a subsidiary of NTPC and an electricity trader have proceeded to participate in competitive tender issued by Bangladesh”. According to the tender in question, DVC-NVVN will be supplying 300 Mw of power to Bangladesh with long-term supply commencing from January 2020 to May 2033 and short-term supply would commence from when the 500-Mw high-voltage direct current transmission line through Baharampur in West Bengal and Bheramara in Bangladesh is completed.  

Joshi has claimed that the short-term power is reported to be agreed to be sold at Rs 3.84 per unit, while the long term supply is reported to be at Rs 5.84 per unit. “Thus, the price range for sale of electricity of 300 Mw to Bangladesh is lower than the cost of domestic power per unit in Delhi (ranges from Rs 3 to Rs 7.75 per unit),” the PIL notes.

Joshi’s has appealed that the country’s apex court needs to consider that Indian generating companies and Indian electricity trading companies cannot offer to export electricity generated in India to outside India at prices lower than the highest prevailing cost of sale of electricity for domestic consumption in India. 

He further alleged that domestic coal as well as the country’s hydel resources cannot be used to generate power for exports.

When asked about the same, a senior official at DVC refused to comment on this issue.

This PIL is undergoing the registry process in court and Joshi hopes the court will hear the plea next week.

• DVC, led by NVVN, wins tender to supply 300 Mw to Bangaldesh 
• This is the first time DVC has won an international tender for cross-border supply of electricity 
• Short-term supply will commence from June 2018 and continue till December 2019, while the long-term power supply will begin from January 2022 and continue till May 2033 
• The installed capacity of DVC is 7,237 Mw 
• Supply to Bangladesh gives DVC opportunity to mitigate accumulated losses