Power plants robbing consumers and the state, says petition

Accusing power plants in the private sector of over-invoicing equip-ment imported from abroad on inflated rates and thus pushing up the power tariff for consumers, a fresh petition has been filed before the Delhi High Court for a court-monitored probe by the CBI. The admission hearing is slated for October 26.

The petition, filed by former bureaucrat and social activist Harsh Mander, draws the court’s attention to various notices sent by the Directorate of Revenue Intelligence (DRI) to Adani group in 2014, Essar Group in 2015 and 40 other power companies in 2016.

Most power companies, the DRI found, followed the same pattern involving over-invoicing through shell companies set up abroad. “They also found out that the quality of coal used by the power companies was sub-standard and affected the efficiency of the plants,” explained Sarim Naved, advocate representing Mander in court.

Barring a preliminary enquiry filed by the CBI against a company belonging to the Adani Group in 2014, there has been no progress and the Government has shown no interest in pursuing the matter which is in the interest of consumers.

Immediately after the petition was filed on September 20, the Income Tax department sent a notice to Mander’s NGO, ‘Centre for Equity Studies’, and threatened a full-fledged inquiry into the institute.

The petition states that the loss to the public exchequer from over-invoicing has been estimated to range from `26,000 crore to `50,000 crore. All these inflated invoices are ultimately passed on to the consumer as cost. These are offences under Sections 419, 420, 468, 471 of the IPC and these are violations of the Foreign Exchange Management Act and the Prevention of Corruption Act. The power tariffs, in some cases, could be brought down to `2 per unit. The admission hearing has been added to the cases filed by Common Cause, an NGO, and Centre for Public Interest Litigation (CPIL), both of whom have stated in the plea that 18 months have passed since the Directorate of Revenue Intelligence (DRI) issued a notice regarding over-pricing of equipment and coal, but the Central Bureau of Investigation had not taken any step.

Since the issue is not being addressed by the Government at all, leading to a loss to the public exchequer and an increase in power tariff for consumers, a court-monitored probe is called for, the petition prays. “This kind of industry-wide issue needs a court-monitored investigation as the government doesn’t seem to be particularly energetic in correcting the situation,” says Naved.

The petition calls for a CBI inquiry or an investigation by a Special Investigating Team (SIT) under a retired judge. It also prays for direction to reduce power tariff and for making it mandatory for shipping bills/invoices to mention international market price of equipment while submitting them to Customs authorities in India.

The petition also seeks directions to the central bank to ensure that all banks call for international market price while granting credit facilities. The petition also submits a list of banks with branches in Dubai, Hong Kong, London and Bahrain which have facilitated such over-invoicing.