CM orders legal action against Chandrababu Naidu over ‘graft’ in energy deals

PTI, Jun 26, 2019, 7:39 PM IST

Amaravati: Andhra Pradesh Chief Minister Y S Jaganmohan Reddy Wednesday ordered a probe into alleged corruption in power purchase agreements signed during the previous TDP rule and initiation of legal action against his predecessor N Chandrababu Naidu and all others concerned over the issue.

Jagan, who held a high-level review meeting on the power sector, said there was “massive corruption” in purchase of power and also in the setting up of new generating stations in the last five years that pushed the electricity sector in the state into the red.

Who purchased power at high prices and who decided to do so? Will peoples money be looted in such brazen manner? Conduct an inquiry and take legal action against all those involved, including the then Chief Minister and the then energy minister, he said, according to an official release.

He also announced a Cabinet Sub-Committee would be set up to probe various scandals in over 30 issues under the Chandrababu Naidu regime.

The power sector in the state is in a totally sinking stage because of the massive corruption in power purchase agreements and steep escalation of costs in setting up new generating stations. The sector is steeped in deep losses because of this,” it quoted the Chief Minister as saying.

The two state-owned power distribution companies (Discoms) owed Rs 18,375 crore to power producers in the last five years, he said.

On the other hand, the state government owed Rs 10,400 crore to the Discoms, Jagan said.

He pointed out that the Discoms suffered a loss of Rs 2,636 crore in the last three years on the purchase of solar and wind power.

Instead of buying power as per the merit order, the TDP government altered rules indiscriminately and purchased on a must-run condition at higher prices from solar and wind power producers. Between 2015 and 2018, wind power was bought at Rs.4.83-4.84 a unit and solar power at Rs 4.50 to Rs 6.80 per unit, he said.

The Chief Minister questioned the need for buying at higher prices from solar and wind power producers when the governments own generating stations offered electricity at Rs 3.25 per unit.

He also said a committee would be constituted to re-negotiate the PPAs with solar and wind power producers and get the rates reduced. The agreements be cancelled if the power producers did not fall in line, he suggested.

See what other states are paying and find out where we can get power at lesser prices, he added.

Referring to the expansion of AP Gencos Damodaram Sanjeevaiah Thermal Power Station (Krishnapatnam) and Narla Tata Rao Thermal Power Station (Vijayawada), the Chief Minister questioned why the cost here was Rs 7 crore per Mega Watt when other states were doing it for Rs 4.49-4.64 crore.

They have looted heavily in similar fashion in Polavaram project as well. At least now explore ways to reduce the costs and see how much money could be saved. Take required steps to go for reverse tendering, he said at the review meeting.