AP govt. orders review of Power Purchase Agreements during Naidu's tenure

Implying anomalies in certain deals, the Government of Andhra Pradesh has decided to review the Power Purchase Agreements (PPAs) entered into during the five-year tenure of past government led by TDP chief N Chandrababu Naidu.

Chief Minister Y S Jaganmohan Reddy has been speaking about the review since day one of assuming office. However, with the Centre writing two letters within a span of a month urging the state government to desist from reviewing the PPAs, the matter has turned into a sensitive issue.

Ajeya Kallam, the principal advisor to the Chief Minister of Andhra Pradesh, on Monday, held a press meet where he clarified that review of PPAs will definitely take place.

Kallam said that during the past five years, PPAs are entered in wind and solar energy sectors. He clarified that those PPAs are agreed for exorbitant prices. The then state government made agreements for 25 years for exorbitant prices which were non-existent in any other parts of the country.

"These agreements will cost the state exchequer the tune of Rs 25000 crores for 25 years. That is the main reason we want to review the PPAs," Kallam said.

The Principal advisor to the CM of AP said that only five companies are responsible for 70 per cent of PPAs.

Ajeya called this decision as a part of YS Jagan's commitment to cleanse the system.

He denied commenting on the earlier TDP government but ridiculed its decision to enter into those PPAs paying exorbitant prices for wind and solar power when ample thermal energy is available in the state.

He also asserted that state government has many people willing to provide solar power at cheaper rates without any PPA and this step will have no adverse impact on investors of the state.