Move review PPAs only to ensure competitive prices: CM

The Andhra Pradeh government's move to re-negotiate power purchase agreements signed with renewable energy producers was only aimed at ensuring competitive prices and pass on the accruing benefit to the people, Chief Minister Y S Jagan Mohan Reddy told the state assembly on Wednesday.

Amid a raging controversy over the move, he also said there had been a lot of 'false' propaganda on the PPAs which has no substance or basis.

The YSR Congress Party government has decided to review power purchase agreements (PPA) worth over Rs 30,000 crore signed by the previous TDP government and the industry is in a fix about investment made already in the state. The review has triggered a rating cut for power projects.

Former chief minister and TDP chief N Chandrababu Naidu had last week had termed the review move as a "recipe for disaster", saying it will hurt the state's prospect to attract investment.

Rejecting the claims, Jagan said the move to renegotiate PPAs was aimed at passing on the benefits to the poor through welfare schemes.

"What we are planning is to bring in power at a competitive rate. If we buy power at a higher rate and that becomes the tariff, then industries will shy away from buying power at a premium price, he said in the Assembly.

He further said: That is the reason why we are trying to renegotiate the PPAs, so that the difference in price can be passed on to the poor through various welfare measures, he added.

He alleged some people were spreading canards on the issue saying no industry would now come to AP.

Its the work of vested interests. There is no truth in it as our policy is clear. We want to ensure power supply in a cost-effective manner, the Chief Minister added.