Karnataka Congress Govt rocked by Rs 7,500 crore smart meter scam: Public looted for contractor profits?

In a major exposé, Asianet Suvarna News has uncovered massive irregularities amounting to Rs 7,500 crore in the procurement of smart electricity meters by the Karnataka Congress government. The report reveals a stark discrepancy in smart meter pricing and the awarding of contracts, raising concerns over financial mismanagement and favoritism.

BJP Demands Probe into Smart Meter Scam

Alleging that irregularities to the tune of Rs 7,500 crore had taken place in the awarding of contracts for procuring smart electricity meters, BJP MLA C.N. Ashwath Narayan on Thursday demanded the cancellation of the contract and the constitution of a House committee to probe the alleged irregularities.

Raising the issue during the debate on the State Budget in the Assembly, Dr. Ashwath Narayan alleged that there were several lapses in awarding the contract for the procurement of nearly 39 lakh smart meters. Instead of directly procuring from manufacturers, the contract had been awarded to a supplier, resulting in escalated smart meter costs, he alleged.

Additionally, he claimed that a blacklisted company had been chosen to provide software support for smart meters.

Also read: Drama in Karnataka Assembly: 18 BJP MLAs suspended amid 'honeytrap' showdown, carried out by marshals (WATCH)

Exorbitant Smart Meter Prices: Karnataka vs. Other States

One of the most shocking revelations is the stark difference in smart meter prices between Karnataka and neighboring states. In other states, smart meters are priced at Rs 7,740, while in Karnataka, consumers are being charged Rs 17,000. This results in an additional burden of Rs 9,260 per meter.

The government is spending Rs 7,408 crore on the installation of 8 lakh smart meters, leading to suspicions about who is benefiting from this additional expenditure.

Smart Meter Type	Old Price (₹)	New Price (₹)
Single Phase Meter	950	4,998
Single Phase Meter-2	2,400	9,000
Three Phase Meter	2,500	28,000

Irregularities in Smart Meter Subsidy Implementation

The Central government provides a Rs 900 subsidy per smart meter, which, in other states, is directly transferred to contracting companies. The remaining cost is collected from customers in easy installments over ten years. However, in Karnataka:

• The state government is paying the full cost of Rs 8,510 per meter upfront to contractors.

• Despite this, customers are still required to pay Rs 71 per month.

This raises serious questions about where the central subsidy is going and why customers are bearing additional costs.

Mandatory Smart Meter Installation and Consumer Burden

Despite regulatory guidelines stating that smart meters should be mandatory only for temporary connections, the Karnataka Congress government has allegedly forced their installation for new connections and even for existing customers:

• BESCOM has made it compulsory for both new and existing consumers, violating Karnataka Electricity Regulatory Commission (KERC) and Central Electricity Authority (CEA) guidelines.

• Accusations suggest old customers are also being charged for meter replacement costs, adding to the financial burden on citizens.

Smart Meter Installation Targets and Tender Violations

The state government plans to install 39 lakh smart meters, with a target of 9 lakh per year. The smart meter tender distribution among different ESCOMs is as follows:

ESCOM	Target Smart Meters
BESCOM	4 lakh
MESCOM	70,000
HESCOM	1.46 lakh
JESCOM	1.17 lakh
CESCOM	60,000

However, allegations of tender violations and awarding contracts to blacklisted companies have sparked massive controversy. Critics are questioning who is benefiting from the additional cost of Rs 7,408 crore and why Karnataka is paying 400%-800% more than other states for smart meters.

Licensed Electrical Contractors Lash Out at Government

The controversy has intensified as licensed electrical contractors have strongly criticized the government for its handling of the smart meter procurement. The BJP, in a post on X (formerly Twitter) on March 20, alleged that the Karnataka government had fixed smart meter rates, unlike in other states, further fueling corruption allegations.

"Licensed electrical contractors have lashed out at the government for committing daylight @INCKarnataka in the name of smart meters. Contractors have expressed outrage that smart meter rates have been fixed in Karnataka, which is not the case in any other state," wrote BJP in an X post.

Also read: Karnataka's political quagmire: Honeytrap scandal rocks the assembly - but at what cost?

Key Questions That Remain Unanswered

• Who is benefiting from the additional Rs 7,408 crore spent on smart meters?

• Why is Karnataka paying Rs 17,000 per smart meter when other states procure them for Rs 7,740?

• Why was a blacklisted company awarded the software contract?

• Why are existing customers forced to install smart meters despite regulatory guidelines stating otherwise?

With mounting pressure from opposition leaders and the public, demands for a high-level probe into the scam are gaining momentum. Asianet Suvarna News will continue to track developments and uncover more details surrounding this alarming case of financial irregularities in the state's electricity department.