It looks like YSR Congress party president and Andhra Pradesh chief minister Y S Jagan Mohan Reddy’s aggressive move to review power purchase agreements signed by the previous Telugu Desam Party government headed by N Chandrababu Naidu on the pretext of huge corruption, has not been taken kindly by the Narendra Modi government.
On Saturday, Jagan received a strong letter from Union minister of state (independent charge) for power and renewable energy R K Singh opposing the decision of the chief minister to revisit the PPAs.
He said any such attempt would result in halting the flow of foreign investments in the power sector.
The latest letter comes a month after a similar letter written by Union energy secretary Anand Kumar to chief secretary L V Subrahmanyam asking the government to reconsider the decision to scrap the PPA.
But Jagan ignored the earlier letter and constituted a cabinet sub-committee to probe into the alleged corruption involved in signing of PPAs by the Naidu government, especially with solar and wind power producers.
He alleged that the previous government had purchased solar and wind power at an exorbitant rates from select companies, compared to the cheaper rates quoted by others in competitive bidding.
He alleged that The Naidu government had made excess payments to the tune of Rs 2,636 crore to these producers of solar and wind power, causing huge loss to the state exchequer.
He ordered that the energy department recover excess payments made to the power companies and legal action be initiated against the higher officials of the energy department responsible for the deals, the minister and the former chief minister as well.
The Union minister indicated that there were no irregularities in signing the PPAs and attached documents pertaining to bidding by the power producers.
“The tariffs were fixed by Central Electricity Regulatory Commission at the national level and the State Electricity Regulatory Commission in respective states,” he said.
Singh said all the PPAs are binding on signatories and if the contracts are not honoured, the investments will stop coming. For the above reasons, it will be wrong and against the law to cancel all the PPAs.
“If there is a prima facie evidence of corruption in the signing of any PPA, the state could order a probe and take action,” he said.
It remains to be seen how Jagan will respond to the same, as the letter and the documents attached to it justify the arguments of the TDP.
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