Adani coal pricing discrepancy13 Jun 2025 05:58
Adani to hold talks with govt over coal tariff dispute
Published : Friday, 13 June, 2025 at 12:00 AM Count : 75
Shahnaj Begum
Adani Power Ltd is set to engage in high-level negotiations with the Bangladesh government later this month to resolve a long-standing dispute over coal tariffs involving its 1,600MW power plant in Jharkhand, which exports electricity to Bangladesh.
A senior official at the Power Division confirmed to The Daily Observer that a delegation from Adani Power is expected to meet with officials of the Bangladesh Power Development Board (BPDB) between June 22 and 23 to address the issue.
The dispute centers on alleged discrepancies in coal pricing. Bangladesh claims that Adani has been inflating coal prices by $10-$12 per tonne, leading to a significant gap in billing. While BPDB calculates the tariff based on the Indonesian Coal Index (ICI3), Adani uses a blended pricing formula that incorporates the cost of higher-grade Australian coal, particularly from Newcastle.
As of May 2025, BPDB estimates its outstanding dues to Adani at $485 million. However, Adani claims the figure exceeds $700 million, attributing the difference to divergent tariff calculation methods.
"The disagreement primarily concerns the pricing mechanism for coal, which directly influences the per kilowatt-hour cost of electricity," a Power Division official said. A high-level committee is currently reviewing the Power Purchase Agreement (PPA) signed with Adani Power (Jharkhand) during the tenure of the previous Awami League government.
To push for a resolution, Adani Power CEO SB Khylia recently held a meeting with Power Division Secretary Farzana Mamtaz at her Secretariat office. During the meeting, Khylia emphasized the urgency of settling dues, citing rising pressure from the company's financial institutions.
Sources said Khylia expressed concern over seven months of outstanding payments, which Adani estimates at around $900 million. In contrast, BPDB maintains that the dues remain below $700 million. Khylia also raised a pending proposal submitted in January 2025, requesting a waiver of approximately $50 million in late payment surcharges for the January-June period. He reportedly expressed frustration over the lack of response from BPDB.
Adani's negotiation team includes four legal experts: Prof. Lawrence Boo and Lucy Reed from The Arbitration Chambers (TAC), and Toby Landau and Prof. V.K. Rajah from Duxton Hill Chambers, Singapore. The panel was appointed under Section 19 of the PPA, which outlines the dispute resolution process.
BPDB's team will be led by its Member (Company Affairs), accompanied by three other senior officials.
"Discussions will be held within the framework of the existing Power Purchase Agreement," said BPDB Chairman Md Rezaul Karim.
Power Division Secretary Farzana Mamtaz downplayed the tension, describing the CEO's visit as a "routine courtesy meeting."
"We are making regular payments to Adani,"
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