Renegotiate or scrap the Adani’s one-sided power deal
All the power purchase deals signed under the Special Powers Act now need to be revised or scrapped as these contracts are causing the country’s excessive financial bleeding. Of the deals, the India’s Adani power deal is the worst.
According to the national committee formed to review unsolicited power contracts signed during the fallen Sheikh Hasina regime, inflated capacity charges in power sector deals have been costing Bangladesh up to $1.5 billion a year.
Media reports, quoting the national committee’s press conference held on Sunday, said the committee also warned that if the contracts with at least 41 power plants under its jurisdiction are not renegotiated, the country could face about $7.2 billion in excess payments over the remaining life of the deals.
The power purchase deal with Adani Group has been described as a “25-year curse,” resulting in an excess payment of $400-500 million annually.
It is to be noted that the national committee, formed on September 5, 2024, viewed the deal as heavily one-sided, potentially fraudulent, and a major contributor to the financial instability of the Bangladesh’s PDB.
Experts believe that there is now a chance to renegotiate this unfavorable deal, which was made under the Speedy Power and Energy Supply (Special) Act 2010.
Currently, Bangladesh is stuck paying a hefty sum every month because of this deal.
Allegedly, many clauses of the agreement were not properly made for in favour of Bangladesh.
To them, if Adani’s contracts were renegotiated and tariffs reduced, it could save up to 50 percent of what the government pays Adani now.
And if the government wants to renegotiate the agreement, now is the right time to do so.
The report further states that if Adani’s power plant suffers losses due to its any internal reasons within India, Bangladesh would have to bear the liability under the contract.
When the price of imported electricity from India stood at 4.46 cents per unit, Bangladesh signed a contract with Adani at 8.61 cents per unit.
The pricing mechanism in the contract is described as bizarre, resulting in Bangladesh paying Adani 40-50 per cent more per unit of electricity.
Accordingly, Adani is extracting an additional $400-500 million annually. Over the 25-year contract period, this excess payment would amount to nearly $10 billion.
We should argue against the deal for its being agreed upon without considering the public interest.
Thus, the Adani power purchase deal must be renegotiated or scrapped for the country’s interest.