Photographer: Dhiraj Singh/Bloomberg

India Court Issues Notice to Government on Power Plant Imports

  • Imports of coal, power equipment over-valued by various firms
  • Petitioners say over-invoicing led to higher power tariffs

An Indian court Monday sought replies from the federal government and its revenue-intelligence department after it heard a petition alleging over-invoicing of imported coal and power plant equipment by some Indian electricity producers.

The Delhi High Court said it will on Feb. 7 resume hearing the petition filed by the non-profit Centre for Public Interest Litigation. The organization, in its plea, alleges that companies, including from conglomerates such as Adani and Essar, gained by inflating import bills. The process resulted in higher power tariff for consumers.

Power tariffs in India broadly consist of two parts -- the equipment cost and variable charges such as fuel. The companies benefited from rules that allow generators to pass on increases in either of these costs through higher tariffs, according to the plea.

Spokesmen at Adani and Essar groups didn’t immediately respond to emails seeking comment.

The Department of Revenue Intelligence had investigated the issue and found evidence of Adani group companies over-invoicing imports of coal and power equipment, while it found Essar group companies over-valuing power plant equipment, according to the petitioner.

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