‘Unavoidable reasons’: UP discom scraps Adani Group tender for 70 lakh prepaid smart meters
Governance

‘Unavoidable reasons’: UP discom scraps Adani Group tender for 70 lakh prepaid smart meters

Madhyanchal Vidyut Vitran Nigam Ltd’s decision comes amid allegations of inflated pricing & cartelisation. UP Electricity Power Consumer Council claims Adani Group was lowest bidder.

   
A power transmission line | Representational image | PTI

A power transmission line | Representational image | PTI

Lucknow: Uttar Pradesh power distribution company Madhyanchal Vidyut Vitran Nigam Limited (MVVNL) — which supplies electricity to 19 central districts — has cancelled its tender for smart prepaid electric meters, for which the Adani Group had allegedly submitted the lowest bid.

The tender was floated for the installation of around 70 lakh meters. The Adani Group’s bid was reportedly worth nearly Rs 5,400 crore.

Cancelling the tender Saturday, the discom cited “unavoidable reasons”. The move comes at a time when the UP State Electricity Consumer Council — a body that represents consumer interests — has levelled allegations of inflated pricing and cartelisation by bidding companies.

ThePrint reached the Adani Group for comment via email. This report will be updated if a response is received.      

In October, UP’s four discoms — MVVNL, Dakshinanchal Vidyut Vitran Nigam Ltd (DVVNL), Purvanchal Vidyut Vitran Nigam Ltd (PVVNL), and Paschimanchal Vidyut Vitran Nigam Ltd (PVVNL) had floated tenders for over 2.5 crore meters. The cumulative estimated value of the tenders was Rs 23,000 crore. 

Apart from Adani, several Indian corporate giants such as GMR Group, L&T, and IntelliSmart had submitted their bids.  

The UP Electricity Consumer Council has alleged that the rate quoted by the lowest bidders in all four regions was 48-65 per cent higher than what is stipulated in the bidding guidelines of the Rural Electrification Corporation (REC), a state-owned financial institution that comes under the Union Ministry of Power. 

The development could mean more trouble for the Adani Group, which is currently dealing with the fallout of a report by New York-based short-sheller Hindenburg Research. In its report, the American company accused the Group of stock manipulation and fraud. 

Since the report came out, Adani stocks have been in free fall, wiping out Rs 3.19 trillion in investor wealth.


Also Read: Market has won & now it’s for Adani to decide whether he will lose or not 


‘Prices 65 per cent higher’

The UP State Electricity Consumer Council claims that the Adani Group emerged as the lowest bidder in a financial bid that opened in December — two months after the October bid. 

Speaking to ThePrint, Avadhesh Kumar Verma, the council’s chairman, alleged that the Adani Group was quoting a price of Rs 10,000 per meter — over 65 per cent more than the estimated cost of Rs 6,000 set in REC’s bidding guidelines. 

In addition, the conditions set for the tender process meant thatnone of the companies that participated in the bidding process are prepaid meter manufacturers”, he added.

“We had submitted written complaints about the same to the secretary of the Ministry of Power, and the PMO. The matter was raised before the office of the UP CM and we also made a complaint (about this) to A.K. Sharma, the UP minister for urban development and energy,” said Verma.

The council fears that non-participation of meter manufacturers could mean that costs will remain high and that companies will play the role of middlemen, thus passing on the high prices to the consumers.

“This has never happened before in UP,” he said, adding that the council was also going to file similar complaints against the tenders of the other discoms.

The All India Power Engineers Federation welcomed the decision to scrap the tender. In a statement issued Monday, it said the companies that were part of the bidding process had resorted to “cartelisation” in an effort “to ensure one company gets a tender”.

“The per meter rate quoted by Adani Group was Rs 10,000, which was much higher than the standard bidding criteria of the REC,” federation chairman Shailesh Dubey told ThePrint. “On this basis, the Madhyanchal discom has scrapped the entire tender process rather than issuing the order to Adani Group, which is a welcome move.” 

(Edited by Uttara Ramaswamy)


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