Bangladesh panel says Adani power contract overpriced, flags anomalies

Bangladesh government-appointed panel claimed electricity from Adani's Godda plant is priced well above market rates and includes Indian corporate taxes

An Adani Power coal-fired plant that exports electricity passes on Indian corporate taxes to ‍Bangladesh and charges more than ​market rates, according to a recent report from a government-appointed committee in Bangladesh.

Adani's Godda plant in India's Jharkhand state priced power at a 39.7% premium over its nearest private-sector competitor and had the steepest cost escalation among electricity import arrangements from India, the National Review Committee (NRC) said in a report dated January ​20.

Reuters reviewed the report, which has yet to be made public.

The NRC said the price divergence was an "outcome of specific contractual choices," adding that it had found evidence of "serious anomalies in the procedures through which the contract was awarded."

 

Adani Power said it could not comment on the review as the committee had neither consulted the company nor provided it with a copy of the report. It also said it was continuing to supply electricity despite large payment dues, adding that other generators had cut back or stopped their supplies.

"We urge Bangladesh government to liquidate our dues at the earliest as this is impacting our operations," the company said in a statement. 

The report called for electricity contracts to be ‌reviewed to identify opportunities for "renegotiation of the most ​fiscally damaging provisions."

The report also said the Adani plant, which supplies more than 10 per cent of Bangladesh's power, used "excessively priced" coal and billed Indian corporate taxes to Bangladesh.

"The price being paid is roughly 50 per cent higher than what it should ‍be," the NRC said, calling it the "most significant statistical outlier" in Bangladesh's cross-border electricity procurement portfolio.

"Standard international practice usually requires independent power plants to ‍bear ‌their own corporate ​taxes in their home jurisdiction," the NRC report ‍said.

"The Adani power purchase agreement deviates by including Indian corporate tax components in the ‍tariff ‍charged to Bangladesh."