Adani Group's Rs 5,400cr smart meter contract scrapped

Uttar Pradesh power utility Madhyanchal Vidyut Vitran Nigam (MVVNL) has scrapped Adani Group's bid for supplying around 7.5 million smart meters worth Rs 5,400 crore.

The state-owned company yesterday cancelled the bid citing "unavoidable reasons" although the Adani Group had emerged as the lowest bidder among four private firms, reports our New Delhi correspondent quoting official sources.

Uttar Pradesh DISCOMs (distribution companies) — including Madhyanchal, Dakshinanchal, Purvanchal and Paschimanchal — representing different regions of the state had floated the tenders for the supply of more than 25 million smart meters. The combined bid value was estimated at Rs 25,000 crore.

Apart from Adani, three other private companies -- GMR, Larsen and Toubro, and Intellismart Infra -- were also in the running for the project.

Adani had quoted a price of Rs 10,000 per smart meter, which was the lowest.

This was allegedly deemed higher, given the cost of Rs 6,000 per meter under the standing billing guideline of the state-owned Rural Electrification Corporation.

The DISCOM is likely to opt for a fresh tendering process. Even other UP DISCOMs could follow MVVNL's lead.

Notably, none of the four private companies that bid for the tender manufactures smart meters. They would have probably sublet the manufacturing after winning the contract.

Uttar Pradesh Power Consumers' Forum had already challenged the bids before the UP Electricity Regulatory Commission (UPERC). They alleged that steep prices were quoted for the smart meters.

Forum President Avadhesh Kumar Verma said the bidding would stoke privatisation of the state energy sector through the back door: it was for the first time that none of the bidders was original manufacturers of smart meters.