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Advisor to CM refutes Sitharaman’s claims on Andhra power sector

Ajeya Kallam says AP getting power from NTPC at Rs 4.44 per unit, not Rs 2.7 as claimed by FM, notes AP never tampered with pacts with international companies.

Published: 28th June 2020 09:10 AM  |   Last Updated: 28th June 2020 09:10 AM   |  A+A-

Ajeya Kallam, Principal Advisor to Andhra Pradesh CM Jagan Mohan Reddy

Ajeya Kallam, Principal Advisor to Andhra Pradesh CM Jagan Mohan Reddy (Photo | EPS)

By Express News Service

VIJAYAWADA:  Rebutting the claims of Union Finance Minister Nirmala Sitharaman that the Centre was supplying power to the State at Rs 2.70 per unit, Principal Advisor to the Chief Minister Ajeya Kallam said the State was actually buying power from public sector units at a rate as high as Rs 9.44 per unit (NTPC, Kudgi). He also sought to clarify that the State government has never tampered with the agreements of projects with international funding.

Speaking to the media in Hyderabad on Saturday, he clarified that the YSRC government has not changed the industrial power tariff of Rs 7.65 per unit fixed by the AP Electricity Regulatory Commission (APERC) during the previous TDP regime. “It was surprising to see the Union minister claim that power was being supplied at Rs 2.7 per unit.

The average power purchase from NTPC is Rs 4.84 per unit without the costs of transmission and distribution. The average cost per unit from NTPC, a central power generating station, is almost Rs 5 per unit with the highest being Rs 9.84 per unit. In fact, the State government is extending a subsidy of Rs 1 per unit for industries. AP is extending electricity to industries at Rs 6.65 per unit,” he explained.

Due to the Central policy, it has become mandatory for the States to purchase power at Rs 9.44 per unit from some of the plants of the NTPC. On an average, the NTPC is selling power at Rs 4.50 to Rs 5 per unit, he clarified. He maintained that the State government has not gone against any agreements with international companies. “We have not tampered with contracts of projects with international funding as claimed. We wanted to review high-cost power purchase agreements (PPAs), but we were asked not to. 

The matter is in the Supreme Court and we informed that the agreements were signed in an unfair manner,” he elaborated.  He said the high-cost PPAs have pushed the State power utilities into a debt trap. “Due to high-cost solar and wind power PPAs, utilities’ expenditure has increased. We wanted to review it, but there was no scope as one, the centre advised against it, and two, legal issues,” he observed.
AP is paying Rs 5.5 lakh per MW a month for drawing power from central transmission lines, which is higher than the remaining States. 

“Just because the transmission lines are passing through AP, the State is ending up paying more than other states. AP has requested the Centre to look into the issue. The Centre, though admitted that it is an unfair practice, is yet to correct the flaw. This alone is resulting in an additional burden of Rs 1,700 crore on the State,” he noted.

He claimed electricity charges increased only due to the agreements reached by the previous TDP government with the Centre. The AP government was bearing additional burden only because of the PPAs and the burden of debt on the State also increased due to the alleged corrupt practices and the wrong pacts inked during the previous regime. “Due to the faulty PPAs of wind and solar power, the State is incurring a loss of Rs 3,500 crore. The present regime is now forced to pay Rs 5,300 crore to Rs 5,500 crore towards interest for the loans taken by power utilities,” he added.

The previous TDP government has left behind a debt of Rs 40,000 crore to the present government, including payment of pending bills worth Rs 13,390 crore. When compared to the previous government, the YSRC government has saved Rs 5,000 crore this year in the power sector, he said. In 2014, the total debt to all the power units was Rs 24,800 crore and now it has increased to Rs 70,000 crore. AP has not been allocated coal mines after the bifurcation of the state and as a result, AP government is forced to bear Rs 2,500 crore additionally a year, he stated. 

‘Action against graft in a systematic manner’
The Union finance minister had said that the government, which came to power promising cleaning of corrupt system, has not taken any action. Responding to this, the principal advisor to the CM asserted, “We are doing it in a systematic manner.

We have a cabinet sub-committee in place, which is probing issue after issue in detail. We have already seen the report of the cabinet sub committee on irregularities in the capital lands. We have sent it to the Centre, which has not taken any decision to entrust it to the CBI. ESI scam has been probed. Next, we have a report ready regarding the AP State fiber grid project. So, we are at it. One by one, everything will be put before proper agencies for appropriate action”

‘Thermal plant may hand over to Sembcorp’
Ajeya Kallam said that the government was in talks with Sembcorp for handing over the Sri Damodaram Sanjeevaiah Thermal Power Station, Krishnapatnam, for its  management as it was financially not viable for the government to run it. “We held talks with various agencies, including NTPC, but in vain”

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