Adani Deal Overspending Poses Economic Risk: National Review Committee

The National Review Committee (NRC) has revealed that the power purchase agreement with India's Adani Power is costing Bangladesh hundreds of millions of dollars in excess payments annually.

This, the committee warns, poses a severe long-term risk to the national economy, industrial sector, and fiscal stability.

These findings were shared during a press conference on Sunday (January 25) at Bidyut Bhaban by the National Committee formed to review contracts signed under the "Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010."

 The committee submitted its formal report to the Power and Energy Adviser on January 20.

Key Financial Discrepancies
The committee highlighted that the lack of competitive bidding under emergency laws led to overpriced contracts where risks were unilaterally shifted onto the state. Specific findings regarding the Adani deal include:

• Price Hike: While the initial price per unit was 8.61 cents, various contractual conditions have pushed the cost to 14.87 cents in 2025.
• Cost Gap: The price per unit is 4 to 5 cents higher than other available sources.
• Annual Loss: Bangladesh is paying an additional $400 million to $500 million USD every year.
• Long-term Impact: If the contract remains unchanged for its 25-year duration, it will continue to drain foreign exchange reserves and cripple budget management.

Systemic Losses and Industrial Threat
Dr. Zahid Hussain, a member of the committee and former Lead Economist of the World Bank, noted a staggering disparity in the power sector:

• Between FY2011 and FY2024, government payments to Independent Power Producers (IPPs) increased 11-fold, while actual power generation only grew four-fold.
• The Bangladesh Power Development Board (BPDB) is suffering annual losses exceeding 50,000 crore BDT, with outstanding liabilities expected to cross 55,000 crore BDT in FY2025.

Dr. Hussain warned that increasing wholesale electricity prices by the required 86% to cover this deficit would make power in Bangladesh more expensive than in India, China, Vietnam, and Sri Lanka, severely damaging export competitiveness and investment.

Allegations of Corruption and Legal Action
Professor Mushtaq Hossain Khan, another committee member, stated that "serious irregularities and corruption" were found in the Adani contract.

• Arbitration: The committee recommended seeking immediate answers from Adani and initiating arbitration in Singapore.
• Evidence: Experts in London have reportedly described the evidence of corruption as "rare" in its strength for international cases.
• Laundered Funds: Information regarding illegal transactions involving 7 to 8 individuals (amounting to several million dollars) has been handed over to the Anti-Corruption Commission (ACC), along with travel documents and other proof.

Committee Leadership
The head of the National Committee, retired High Court Justice Moyeenul Islam Chowdhury, emphasized that this crisis was not inevitable but the result of specific policy and institutional decisions.

The 5-member committee was formed by the interim government on September 5, 2024, and includes experts from BUET and financial consultancy sectors.