Adani hides info for higher capacity charge from Bangladesh

Adani Power Limited concealed the fact from Bangladesh that India exempted almost all import taxes for the Godda power plant in a manipulative bid to get a higher capacity charge in breach of its power purchase agreement, documents showed. In the agreement, Adani also hid information about the Goods and Service Tax, introduced four and a half months before it was signed on November 5, 2017, which, according to Indian media, should have reduced other tax burdens such as excise and customs duties, VAT, and surcharges, by up to 30 per cent.
The first unit of the two-unit 1,600 MW coal-fired Godda power plant being built in Jharkhand for exporting electricity to Bangladesh for 25 years is likely to begin operation at the end of March. Section 13.1(e) of the agreement requires Adani to inform the Bangladesh Power Development Board about changes in tax and VAT rates within 30 days of any such change occurring. Since the Godda power plant became a special economic zone on February 25, 2019, Adani has imported machinery and equipment almost without any taxes and would not have to pay taxes for importing coal. Adani Power Limited has not yet informed the PDB about the matter.
 The controversial capacity charge is determined based on several assumptions at the time of the signing of the power purchase agreement, paving legal grounds for power producers to get a return on their investments, after paying off loans and interest, even if no electricity is procured. A 2022 study by the Bangladesh Working Group on External Debt estimated the capacity charge to be paid over the lifetime of the Godda power plant to be over $11 billion with a monthly payment of more than $423 million.
Experts said Adani should be penalised for breaching the agreement, thus Bangladesh should immediately end the agreement. Being a credit crunch country now, the withdrawal will plug a big hole that drains out huge money.