The Uttar Pradesh power utility Madhyanchal Vidyut Vitran Nigam Limited has scrapped a tender for the purchase of smart meters in which the Adani Group had emerged the lowest bidder.

The notification cancelling the group’s Rs 5,400-crore bid for the region, which includes Lucknow, was issued by Ashok Kumar, superintending engineer of Madhyanchal Vidyut Vitran Nigam Limited on February 4.

Smart meters are being purchased for the state’s four regions -- Madhyanchal, Dakshinanchal, Purvanchal and Paschimanchal.

Kumar said the decision to scrap the Madhyanchal bid was taken for “unavoidable reasons”.

Sources in the department said the other three regions would have no option but to follow suit because according to the recommendation of regulatory bodies, the cost of a meter was pegged at Rs 6000, which was the benchmark.

The Adani Group had quoted it at Rs 10,000, which was lower than others, but much above the benchmark.

The department’s employee unions were suspicious of the bid, fearing it would be a gateway to the privatisation of UP Power Corporation Limited. The All India Power Engineers Federation on Monday said it welcomed the decision to cancel the tender.