Bangladesh says Adani deal could be scrapped if irregularities found

Bangladesh's interim government has said that it will not hesitate to cancel an existing power contract with India's Adani group if any irregularities or corruption are proven.

The 2017 power supply deal between Adani Power and Bangladesh had come in for scrutiny after the ouster of the Sheikh Hasina-led government last year.

The contracts (generally) state that no corruption has occurred, but if proven otherwise, cancellation is possible, Energy Affairs Adviser Muhammad Fouzul Kabir Khan was quoted as saying by local media.

The adviser was reacting to an interim report submitted by a National Review Committee, which was formed to review the power sector contracts by the Hasina regime.

There was no immediate reaction from the Adani group on the adviser's comments.

The National Review Committee, headed by retired High Court judge Moinul Islam Chowdhury, recently submitted its interim report on alleged corruption during deals inked under the Hasina regime. The committee is expected to submit the final report in January.

Chowdhury, who is the chairman of the committee, said the six-member team found massive governance failure and massive corruption in the energy sector, while there were gross irregularities, particularly in signing the quick rental deals.

In the course of review of power purchase agreements, we found there was massive corruption, collusion, fraud, irregularities and illegalities, he said.

Chowdhury told reporters that the committee has prepared a separate report on the power purchase deal with the Adani group as well.

Under the 2017 deal, Adani Power's Godda power plant in Jharkhand was to supply 100 per cent of the electricity generated from burning coal to Bangladesh for a period of 25 years.

In June, Bangladesh paid USD 437 million to Adani Power, significantly reducing its outstanding dues. Previously, Bangladesh struggled to pay dues, which caused Adani to reduce supply.

One of the committee members told reporters that contracts with foreign companies involved legal complications, making it difficult to unilaterally scrap them without exhausting the necessary process to evade high penalties.

"But we believe, you will get strong evidence of corruption when a legal process begins at home and abroad against Adani and a few other companies related to Adani who are involved in the corruption, the state-run BSS news agency reported, quoting the unnamed member.

Prominent jurist Shahdeen Malik has asked the government to weigh the risks of scrapping foreign deals, saying there were legal grounds to cancel such foreign contracts, and taking the matter to an international court could trigger claims of up to $5 billion.