Retired Bureaucrat EAS Sarma writes to GoI, objects to "out-of-way" exemption to Adani Group to sell power in India
Babushahi Bureau
Chandigarh, August, August 25, 2024: Adani Group has been given an out-of-the-way exemption by the Ministry of Power to sell power in India from its export-intended power plant, and this should not be allowed to earn excessive profits and overcharge from domestic consumers, said EAS Sarma former Secretary Power.
In a letter to Cabinet Secretary Rajiv Gauba EAS Sarma said that Adani Group's Godda power plant in Jharkhand has enjoyed enormous financial benefits because power from that plant would be exported to Bangladesh.
"The power project became its own ‘special economic zone’ and was exempted from paying numerous taxes and duties, and was allowed to access cheap government finance. Adani Group had also been allowed to import coal from its Australian coal mine at a price not discovered through competitive bidding," he said.
"Within a few days after a change in government in Bangladesh, the Union Ministry of Power amended the relevant rule to permit the power exporter Adani group to sell power to domestic consumers. Any other power company placed in a similar situation would not have perhaps received such a prompt response of munificence, former Bureaucrat added.
Sarma cautions that the Adani Group, equipped with all the concessions secured by it from the center and state governments on the premise that it would export power to Bangladesh should not be allowed to exploit the opportunity to sell power to domestic consumers at prices at which it will earn excessive profits and overcharge domestic consumers.
The Godda power plant had been given the status of a SEZ with associated benefits. The group has also been granted exemption of customs duty on imported coal and power generation equipment, clean energy cess and concessional interest on loans from PFC/REC.
The letter mentions that there have been accusations of the Adani Group and others over-pricing their overseas coal supplied to State power utilities. Against that background, the group should not be allowed to charge excessive tariffs from domestic electricity consumers on the basis of over-priced coal, especially considering that Adani's Australian coal has not been subject to competitive bidding.
EAS Sarma's letter to Union Ministry of Power
E A S SarmaFormer Secretary to the Government of India
To
Shri Rajiv Gauba
Cabinet Secretary
Dear Shri Gauba,
Adani Group's Godda power plant in Jharkhand had been granted several concessions, some perhaps undue, on the ground that power from that plant would be exported to Bangladesh. Adani Group had also been allowed to import coal from its Australian coal mine at a price not discovered through competitive bidding.
I understand that, as soon as there was a change in government in Bangladesh, surprisingly, the Union Ministry of Power seemed to have worked overnight, perhaps under extraneous pressure, to amend the relevant rule on 12th August 2024 to permit the Adani Group to sell power to domestic consumers. Any other power company placed in a similar situation would not have perhaps received such a prompt response of munificence.
It is important to ensure that the Adani Group, equipped with all the concessions secured by it from the Centre and State governments on the premise that it would export power to Bangladesh does not now exploit the opportunity to sell power to domestic consumers at prices at which it will earn excessive profits.
For example, unlike other stand-alone power plants, the Godda power plant had been given the status of a SEZ with associted benefits. The group has also been granted exemption of customs duty on imported coal and power generation equipment, clean energy cess and concessional interest on loans from PFC/REC. In the guise of not being allowed to export electricity to Bangladesh, the Adani Group should not be allowed to earn excessive profits and overcharge domestic consumers.
There have been accusations of the Adani Group and others over-pricing their overseas coal supplied to State power utilities. Against that background, the group should not be allowed to charge excessive tariffs from domestic electricity consumers on the basis of over-priced coal, especially considering that Adani's Australian coal has not been subject to competitive bidding. An independent evaluation of the quality of Adani's Carmichael coal and its realistic price in the global context is urgently called for.
I suggest that the Ministry of Power, in consultation with the Central Electricity Regulatory Commission (CERC), makes sure that the Adani Group does not profit at the cost of domestic consumers.
Regards,
Yours sincerely,
E A S Sarma
Visakhapatnam
24th August 2024