Gandhinagar: Gujarat Congress chief Shaktisinh Gohil addressed two Press Conferences – one in Delhi and another in Ahmedabad – on alleged irregularities by energy department of the State government in connection with payments made for power purchased from Adani group. Gujarat government’s spokesperson minister Rushikesh Patel called the media later to refute the allegations.

Gohil showed a letter written by Gujarat Urja Vikas Nigam Ltd dated May 15, 2023 to Adani Power Mundra seeking recovery of Rs 3802 crore, excess payment made by the GUVNL towards energy charges for the two Power Purchase Agreements (PPA) the GUNVL and Adani Power had signed.

“The excess payment of whopping Rs 3900 crore has been made by the GUVNL from 15-10-2018 to 31-03-2023, for five years,” Gohil alleged and added – “however, that the GUVNL was making excess payments to the Adani Power for five long years from October 2018 to March 2023 and then suddenly realised in May 2023 that it had made excess payments.”

“The paragraph no 3 in the letter shows the GUVNl is helplessly stating that the rate at which coal is being purchased by Adani Power Mundra is significantly higher than the actual market value at which the coal is being traded in Indonesia,” Gohil said.

“The GUVNL has been repeatedly seeking documents/ invoices/reports with regard to the reference being taken by Adani Power in procurement of coal through spot market inquiry which reflects coal procurement in transparent and competitive manner. However, the Adani Power has been continuously procuring coal at premium price from a few selected spot suppliers which is not reflecting the actual market value of Indonesian coal from time to time and not submitting the supporting documents. This means, the GUVNL has made payment of Rs 13802 crore during 2018 to 2023 despite the fact that the Adani power did not submit any invoice or report or supporting documents of coal procurement.”

“Releasing of payment without due diligence of invoices and supporting documents in any government cannot be done by any officers,” Gohil added.

Meanwhile, Gujarat government’s spokesperson minister Rushikesh Patel called a press conference and refuted the allegations made by the opposition party chief.

Patel said Congress would put some issued among the people and then repeat them time and again as and when some elections approach, but the voters are smart enough to separate the truth and false. Patel said, this letter(by GUVNL) is on the record. It is said that it has been received through RTI, but this letter is in public domain and not a private document. This attempt is made just to mislead the people.

Patel said – “Rs. 13,802 crore sum is paid as per the continuous process based on the rates decided in year 2018 Power purchase agreement(PPA). It’s a payment mechanism. Such power plants are national assets. We have been purchasing power from them continuously. Difference of opinion, legal interpretations can be there, but we have continued to make sure the supply of power. When rates are decided as per year 2022’s new supplementary agreement, we will include the payment of pending sum. Year 2022 agreement will be the final, while year 2018 arrangement is interim.”

Patel further said – it’s a legal process. We have made our claim. As per the year 2022 agreement, base rates are finalized and we will balance the amount.

Patel said rainfall has on halt at present and there has been more demand of power. This has happened in the past too, and Gujarat government has ensured continuous supply of power.

Gujarat government note:

State Government Spokesperson Minister Shri Rishikesh Patel clarified the allegations made by Gujarat Pradesh Congress President Shri Shaktisinh Gohil regarding “payment of crores of rupees as additional energy charges to Adani Power Mundra during the last 5 years without documents” and termed these allegations as misleading to the public.

In this regard, the Spokesperson Minister gave a detailed explanation and said that,

1. In 2006, National Tariff Policy was notified by Govt. of India according to which Distribution Companies were mandated to procure power from Private projects only through tariff based competitive bidding process.

2. In order to meet the increasing power demand, in 2007, State tied up capacity with projects selected through tariff based competitive bidding which has been approved by State Electricity Regulatory Commission. State has signed 2 Power Purchase Agreement with Adani Power Mundra Ltd. PPA dated 06.02.2007 (Bid 1) and PPA dated 02.02.2007 (Bid 2). In addition, State has tied up long term Power Purchase Agreement with Tata Power (Mundra UMPP) and Essar Power Gujarat Ltd.

3. All the above projects have been utilizing the imported coal for generation of power. In 2010, Govt. of Indonesia has promulgated regulations modifying the export prices of coal.

4. In 2017, imported coal based power projects had discontinued supply of power under PPAs citing increase in imported coal price and seeking offset of increase in imported coal price towards Energy Charge under the PPA.

5. In July-2018, vide GR, State Govt. constituted a High Power Committee under the chairmanship of Retired Supreme Court Justice Shri. R. K. Agrawal to receive recommendations for resolution of issues raised by imported coal based projects in the State regarding increase in imported coal price due to Indonesian Regulations.

6. High Power Committee in its Report has recommended allowing fuel cost pass through to the projects through signing of Supplemental PPA with Projects.

7. With an objective to ensure that uninterrupted power is made available to the consumers of the State, State Govt. accepted the recommendations of High Power Committee with certain modifications and in order to keep power purchase cost overall lower decided that Project Developer will have to share Rs. 0.20/unit reduction in Fixed Cost, Sharing in mining profit and extend the tenure of the PPA and directed for signing of Supplemental PPA.

8. As per the above, Supplemental PPA dated 5.12.2018 has been signed with Adani Power Mundra Ltd. as per which Energy Charge payment is to be made at lower of actual rate at which coal is procured and HBA Index derived price (HBA Index is the Govt. of Indonesian index notifying coal price).

9. In order to amicably resolve the pending issues related to Energy Charges, past period losses and taking into consideration the power requirement of the State, GUVNL and Adani Power entered into Settlement Deed dated 3.1.2022 and GUVNL filed a petition before Central Electricity Regulatory Commission with a request to determine and recommend the Base Rate as on 15.10.2018 after prudent check and taking into consideration the relevant market prices at that time.

10. Central Electricity Regulatory Commission vide order dated 13.06.2022 had determined the Base Rate and the matter is presently under consideration at the State Govt. level and after the finalization and approval of the Base Rate by Govt. of Gujarat, the net energy payment from 15.10.2018 will be reconciled and accordingly adjusted.

11. After September-2021, there has been an unprecedented increase in prices of imported coal in international market and the prices has reached upto USD 331/MT in the year 2022. All the imported coal generators had shut down their plants. At that time in order to avoid the energy crisis and circumvent load shedding in other States, even Ministry of Power, Govt. of India had issued Section 11 directive under Electricity Act 2003 to all imported coal based generators to generate and supply power.

12. In the above circumstances, in view of increased power demand of the State including of agriculture sector and with a view to continue to receive 2434 MW capacity from Adani Mundra power plant, till the time State Govt. decides and approves the Base Rate, Gujarat Urja Vikas Nigam Ltd. on interim basis had considered the Energy Charge methodology as per SPPA dated 5.12.2018 for purpose of payment.

13. For the purpose of interim payment, the rate of coal purchase as submitted by Adani Power and the rate worked out as per the HBA index derived price, whichever is lower, has been considered for the purpose of energy charge payment on interim basis and this payment would be subject to adjustment as per the computation pursuant to approval of Base Rate as on 15.10.2018 by Govt. of Gujarat.

14. With an objective that quality and uninterrupted power supply is available to the consumers of the State, GUVNL has been procuring power from Adani Power with payment of Energy Charges on interim basis till Govt. approves the Base Rate.

15. In view of above, the allegation made through Press media that payment has been made to Adani Power during last 5 years without any documents is misguiding since the energy charge payment from 15.10.2018 is not final and would be reconciled and adjusted upon approval of Base Rate by Govt. of Gujarat.

The allegations made by the Opposition party referring to the letter are baseless because the same is a commercial communication between the parties to the contract and has been quoted out of context. DeshGujarat