By Krishna N. Das
DHAKA (Reuters) – Bangladesh wants to slash prices under a power purchase agreement with India's embattled Adani Group unless it is canceled by a court, which has called for an investigation into the 25-year deal, it said. told Reuters his de facto energy minister on Sunday.
Adani Group founder Gautam Adani already faces accusations from US authorities that he was part of a $265 million bribery scheme in India, allegations he has denied, even as an Indian state reviews a deal energetic with the group and the French TotalEnergies (EPA:) pauses. your investments.
In Bangladesh, based on an appeal by a lawyer demanding the possible cancellation of the energy deal, the High Court last week ordered a committee of experts to examine the contract under which Adani supplies power from a 2,000 coal-fired plant. million dollars in eastern India. The investigation is expected to conclude in February, when the court must issue its order.
The deal was signed in 2017 by Adani and a government entity under Prime Minister Sheikh Hasina, who was ousted this year amid a popular uprising and accusations of widespread corruption. Supply of the 1,600-megawatt plant, which uses expensive imported coal, began last year and covers about a tenth of Bangladesh's consumption.
“Renegotiate in case of anomalies in the contract. Cancel only in case of irregularities like corruption and bribery,” Muhammad Fouzul Kabir Khan, Bangladesh's power and energy advisor, said in an interview in his office.
“Both are based on the results of court-ordered investigations.”
He said some issues, such as Bangladesh not benefiting from some Indian tax breaks for the power plant, have already been brought to the attention of Adani and could partly form the basis of a renegotiation of the deal.
Adani did not immediately respond to a request for comment over the weekend. adani power (NS:) Ltd said in its latest annual report that the plant in the Indian state of Jharkhand would provide Bangladesh with uninterrupted, reliable and affordable electricity and would “significantly reduce the average cost” for the end consumer.
Khan said the US corruption allegations against Adani may have no relation to the Bangladesh deal.
A separate committee formed by Bangladesh's interim government is already investigating the Adani deal and six other energy contracts with the aim of ensuring that the investigations “will be acceptable in international negotiations and arbitrations,” according to a government statement.
At 14.02 taka a unit, Adani charged the highest tariff for power generated in India to Bangladesh in the 2022/23 fiscal year, compared to an average price of 8.77 taka ($0.0737), according to the state-owned Bangladesh Power Development Board.
Adani's rate fell to 12 taka per unit in 2023/24, still 27% higher than the rate of other private Indian producers and up to 63% higher than Indian state plants, Reuters reported.
The retail price in Bangladesh is Tk8.95 per unit, resulting in an annual power subsidy bill of Tk320 billion to the exchequer, Khan said.
“As prices are high, the government has to subsidize,” Khan said. “We would like to see power prices, not just Adani, fall below average retail prices.”
Bangladesh, however, will continue to pay for the power it imports from Adani, he said. Recently, the company had halved its supply due to a delay in payment.
Khan said Bangladesh has enough domestic capacity to meet its needs, although some plants are currently idle or generating below capacity due to gas shortages or other reasons.
“When Adani cut his supply in half, nothing happened,” he said. “We will not allow any energy producer to blackmail us.”
(1 dollar = 119.0000 taka)
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