Adani has become a household name in Mumbai, supplying power to 30 lakh consumers across the city and its suburbs, after the firm took over the infrastructure arm from Anil Ambani’s Reliance Power. It has surged far ahead of rivals such as Tata Power which has seven lakh customers directly getting power from the firm in the maximum city. Now the steel to salt conglomerate’s objection to a Rs 7000 crore contract being awarded to Adani Electricity, has been dismissed by the Supreme Court.
Adani got unfair benefit?
The project involves building a power transmission infrastructure in Mumbai, and Tata is dissatisfied that it was awarded to Adani without going through tariff-based competitive bidding. The process would’ve allowed other firms to quote the lowest electricity rates, to secure the contract, but instead it was awarded directly to Adani on nomination basis. Tata contested that this led to exclusion of other interested parties from the auction, and Adani got undue advantage from the Maharashtra Electricity Regulatory Commission.
States have autonomy to choose
The Supreme Court maintained that the Electricity Act allows state governments to regulate transmission within their territories. This means that the move to use Section 62 for nomination-based process instead of Section 63 for competitive bidding, by Maharashtra’s authorities is valid. Previously in the case, Adani Electricity has even gone to the extent of accusing Tata Power of trying to delay infrastructure projects in the state.
Accusations exchanged by both sides
It had also said in court that Tata was trying to sensationalise the issue, because it has vested interests and was playing a dual game. Adani had alleged that Tata wants to delay the transmission line project, because that would reduce reliance of distributors on its generating stations.
The court in its verdict held that it can’t interfere in the MERC’s decision, since it is an independent agency responsible for setting tariffs.
