Cabinet Panel Report On PPAs Soon: Buggana Rajendranath


AMARAVATI: In response to a question raised by the Opposition TDP about the Power Purchase Agreements (PPAs), the State Finance and Legislative Affairs Minister Buggana Rajendranath informed the Assembly that the committee appointed to probe into the PPAs signed during the previous TDP term will submit its report soon.


Speaking further during the Winter Session of the Andhra Pradesh Legislative Assembly session which commenced on Monday morning, he said the panel was studying all aspects of the agreements as they were done in a hurry at the fag-end of the term and put a huge burden on the state exchequer.


In a matter of just 15 days, 41 PPAs were signed and the terms were heavily loaded in favour of the Companies and there was every need to renegotiate the terms, he said, adding that the Government plans to come out with a detailed report which is time consuming.


Asserting that there has been no timeline fixed for the Committee, the Finance Minister, during the question hour, said that all the data will be acquired and the report will be submitted soon. The Centre has written a letter to take action against irregularities in the PPAs.


The dues of DISCOMS have increased Rs 9,000 crores in 2014 to Rs 29, 000 croers in 2019 during the previous TDP term and we have cleared dues of Rs 4,900 crores of the previous government, the Finance Minister said.


He made it clear that though wind and solar energy are good to maintain ecological balance, they are right now not financially viable. The minister asked whether it was possible for the production of wind energy in just 15 days. It would take at least one-and-half years.


Renewable energy costs at least Rs 4.84 per unit. At the time thermal energy costs only Rs 3 per unit. So the difference is Rs 2 per unit. Under the circumstances the Discoms had made it clear that they would not be able to take wind or solar (renewable) energy.


There will be a fixed cost for the use of thermal power. It means that even if thermal power is not utilized, an amount of Rs 1.50 per unit has to be paid for coal which hikes the price. Hence, the government decided to review the PPAs, the minister added.


In fact, the previous government had to pay arrears to the Discoms. Similarly, while the Discoms suffered a loss of Rs 9,000 crore in 2014-15 and it had reached Rs 29,000 crore in 2018-19. So, it amounts to increasing the losses to the Discoms to Rs 20,000 crores in five years.


The Central government had clearly mentioned that action should be initiated if any irregularity was noticed. The previous TDP government had also owed a lot to power companies. While it owed Rs 3910 crores in 2014-15 to power companies, it had increased to Rs 21,540 crores by 2018-19. The present government is clearing all the arrears, he said.

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