Karnataka BJP leader alleges ₹15,568 cr 'misappropriation' in smart meter tender process

A smart meter is an electronic device that records data such as electricity consumption, voltage levels, load, and various other technical parameters.

BJP leader C N Ashwath Narayan on Tuesday alleged that 'misappropriation' amounting to approximately ₹15,568 crore has taken place in the smart meter tender process of Bangalore Electricity Supply Company Limited (BESCOM) and other Electricity Supply Companies (ESCOMS).

Dr CN Ashwath Narayan.

According to officials, a smart meter is an electronic device that records data such as electricity consumption, voltage levels, load, and various other technical parameters. This information is periodically transmitted to the server.

Accusing the Siddaramaiah-led Congress government of "favoritism and irregularities" in the tender process, the MLA claimed that the scale of this misappropriation is even larger and emphasised that ESCOMs should adhere to the Karnataka Electricity Regulatory Commission (KERC) rules.

The former Deputy Chief Minister's statement came a day after the Energy Department dismissed allegations of irregularities in the installation of smart meters, with BESCOM MD Shivashankara asserting that the smart meter purchase price was determined scientifically and executed with full transparency.

Addressing a press conference, the BJP leader argued that the Karnataka Electricity Regulatory Commission (KERC) rules do not mandate the use of smart meters.

He stated that while smart meters can be made mandatory for temporary connections, they cannot be enforced for permanent and new customers.

Citing Central Electricity Authority (CEA) regulations, the former Minister explained that smart meters for new consumers can only be mandated after all existing meters have been replaced with smart meters.

"Smart meters are not mandatory, even under Central Electricity Authority rules. The bid capacity under the Karnataka Transparency in Public Procurements (KTPP) Act was not mentioned in the tender. It should have been ₹6,800 crore," Narayan said.

The BJP MLA pointed out that under the KTPP Act, the required turnover should be ₹1,920 crore, whereas the tender amendment contract value was specified as ₹107 crore annually.

He further alleged that despite a rule stating that no blacklisted company should be awarded the contract, BCITS, which was blacklisted in Uttar Pradesh, was still considered.

"As per central government guidelines, an experience of installing just one lakh smart meters is sufficient. However, this tender required experience with 10 lakh ordinary meters, seemingly to limit competition and favour Rajashree Electricals," Narayan alleged.

He noted that the estimated cost of the project was ₹571 crore but was later amended.

Criticising the "lack of transparency", Narayan said, "The tender was issued without specifying the total amount. The KTPP Act was not followed, nor were central government rules implemented. A contractor with no experience in manufacturing or installing smart or digital meters was considered."

Highlighting that smart meters have been installed at lower costs in Congress-ruled states like Himachal Pradesh, Telangana, and Kerala, he pointed out, "In Karnataka, each meter costs ₹17,000, whereas in other states, the price is ₹7,740 per meter."

Recalling that an IAS officer and a minister were arrested in Bihar in 2023 over a similar scam, Narayan alleged that the Karnataka government had violated the KTPP Act at every level.

"This is daylight robbery. The (state) government must be held accountable. They are making smart meters mandatory without any legal backing," he alleged.

According to the BESCOM MD, as per the regulations, the tender process followed the Standard Bidding Documents provided by the Ministry of Power and complied with the KTPP Act.

The tender was issued on September 26, 2024. With the approval of the BESCOM Board of Directors, the contract was awarded to Rajashree Electricals, who submitted the lowest bid, on December 23, 2024.