VIJAYAWADA: Andhra Pradesh Chief Minister YS Jagan Mohan Reddy on Wednesday ordered legal action against former chief minister and TDP chief N Chandrababu Naidu for his alleged role in inking dubious deals with solar and wind power companies which caused enormous losses to power distribution companies (Discoms) in the State. The announcement was made at a review meeting on power sector chaired by the Chief Minister at his camp office in Vijayawada.
"Change is impossible without uprooting corruption," he told officials. Getting to the heart of the matter, the meeting focused on what pushed the power sector into a crisis. As of May this year, the Discoms owe Rs 18,375 crore to power generation companies -- due in large measure to power purchase agreements (PPAs) signed in the last five years and alleged corruption in establishing power generation units. During the same period, the outstanding amount to be paid by the State government to the Discoms increased to Rs 10,400 crore.
Scrutinising the PPAs, particularly those entered into with solar and wind power companies, the Chief Minister noted that rules were subverted to purchase power instead of buying it as per merit at a lower price. "Power was purchased at a hefty price under 'must run' policy from 2015. It meant thousands of crores of loss to the Discoms as the then government purchased power on a priority basis at higher prices from wind and solar energy companies though the same was available at a lower price in the open market," he said. The loss caused to the Discoms because of this process was Rs 2,636 crore.
A senior aide to the Chief Minister, who was present at the meeting, told Express that details, pertaining to the (PPAs) with wind and solar power companies, that came out were truly mind-boggling and could easily qualify as one of the biggest scams in the country. Between 2015-18, wind power was purchased at a unit price of Rs 4.83- Rs 4.84. Similarly, solar energy was purchased for Rs 4.50 to Rs 6.80 per unit. During this period, Rs 1.25 per unit was paid to State-run power generation companies irrespective of whether the government bought power from them or not. "What is the rationale behind allocating more funds for wind and solar energy when there was an opportunity to buy power from State-run companies at Rs 3.25 per unit?" the Chief Minister wondered.
A visibly angry Jagan felt criminal cases must be booked against those who made these decisions and announced that a committee would be set up to renegotiate with the solar and wind power companies in question to reduce the tariff and check the possibility of recovering the amount, over and above the market rate, paid to them. "Examine the tariff rates prevalent in other States at that time. If the companies do not relent, scrap the PPAs and look for alternatives," he advised the officials.
In this context, he mentioned Krishnapatnam and VTPS power generation units and asked why seven crores was spent on units with lower power generation capacity than those in other States. The issue of temporary PPAs entered into with the gas-based Lanco Spectrum also came up for discussion. The agreement with Lanco expired in 2016 but temporary PPAs were signed to pay 40 paisa more per unit taking the per unit cost to Rs 3.70. Jagan asked the officials the reason for the same, pointing out that at that time there was a chance to buy power from GMR Vemagiri whose per unit cost was Rs 3.29. The State could have written a letter to the Centre to supply gas to GMR and bought power from it. Because of the temporary PPAs, the government had to bear an additional burden of Rs 92 crore per annum. In three years, the State exchequer lost Rs 276 crore.
"We must recover this amount and also the money that was paid to other companies in violation of rules. We should send a message that we will not tolerate this kind of activities. Probe the then senior officer responsible for these scams as also the then minister and chief minister. Send a letter to the Centre explaining these details and ensure that gas is supplied," the Chief Minister instructed the officials. However, in the same breath, he clarified that he was not finding fault with any official. "You must bring about a change. If I too close my eyes... they may pay something to me too. We must recognize that people are important to us. What will we do with money? Change has to begin somewhere. It is my responsibility to protect officials. I am not angry with you but only at the corruption indulged in at the top level," he said, adding that his only agenda was to reform the system.
Asked if the Jagan government could be viewed as vindictive, the senior aide said there was nothing personal. "The Chief Minister is determined to clean up the system. He won't spare anyone if found guilty." Under the TDP regime, the then CM Chandrababu Naidu held the power portfolio from 2014 to 2017 and later, it was handed over to K Kala Venkata Rao.