Andhra Pradesh

'Bidding was transparent': Nara Lokesh rebuttal to Power Purchase Agreement reviews

Lokesh shared a letter from the NTPC which said that the PPAs were signed at the least tariff rate, and that purchase rates were fixed below market rates.
'Bidding was transparent': Nara Lokesh rebuttal to Power Purchase Agreement reviews
'Bidding was transparent': Nara Lokesh rebuttal to Power Purchase Agreement reviews
Written by:
TNM Staff
Sharing a letter from the National Thermal Power Corporation Ltd (NTPC), Nara Lokesh tweeted on Tuesday that the Power Purchase Agreements (PPAs) signed while the Telugu Desam Party was in power were done in a transparent manner. 
 
Earlier this month, the Andhra Pradesh government decided to go ahead with the review of all PPAs signed during the TDP’s term. Principal Advisor to Chief Minister, Ajeya Kallam, said that the PPAs were causing huge losses to the state exchequer, and that the review was necessary as the state agreed to pay higher tariff in the agreements signed with renewable power producers. 
 
Dismissing Chief Minister Jagan Mohan Reddy’s decision to review the PPAs, Lokesh, son of former CM Chandrababu Naidu, who is also an MLC and General Secretary of the TDP, tweeted, 
 
“YS Jagan’s name is synonymous with stupidity and arrogance. Although intellectuals and the Centre declared that the power contracts had been made in a transparent manner, and no review is needed, Jagan did not listen. He wants to form a committee to somehow prove corruption which never happened.”
 
 
The letter dated July 22, addressed to the APSPDCL (Andhra Pradesh Southern Power Distribution Company Limited), states that the PPA between NTPC and the Power Distribution Companies in AP (APSPDCL and APEPDCL) “provides for a tariff lesser than the generic tariff determined by the Central Commission.” 
 
Indicating that the decision to review the PPAs was based on a ‘grudge’ against the TDP, Lokesh tweeted, “Mr Jagan! I like your resentment. But the NTPC seems to not have liked it. That’s why they have written this letter. They’ve mentioned that the power contracts during the TDP term were done in a transparent manner, and that purchase rates were fixed below market rates.”
 
 
The letter also says that the NTPC acted in the interest of the state Discoms (Distribution Companies), and had “passed on all the benefits competitive bidding process of selection of packages.”
 
The Andhra Pradesh government had decided to go ahead with the review of PPAs, in spite of the Centre’s advice against doing so. Defending its move, the YSRCP government said that the state would have to bear the high cost of wind and solar power for the next 25 years and incur a loss of Rs 3,000 crore every year.
 
Detailing the timeline of the bidding process for the PPAs signed with the AP Discoms, the letter stresses that the PPAs were signed at the least tariff rate discovered at the time through the bidding process. 
 
The letter declares that the contention that “real market prices were not discovered” during the bidding process is “erroneous and not based on facts.” It says that the entire bidding process had been approved by the APERC (Andhra Pradesh Electricity Regulatory Commission) after due diligence. 
 
“The Electricity Regulatory Commission also praised the bid selection process. Alas! Noone understands your grudge. Instead of whiling away your time with committees and reviews, focus on the power cuts in AP. Don't push the state into the dark,” Lokesh tweeted. 
 
 
Kallam had alleged that wind and solar projects were sanctioned indiscriminately by the government. PPAs worth thousands of crores of rupees were signed with a handful of developers without going through a transparent procurement process, ignoring the lower rates prevalent in the country, he said.
 
He pointed out that the government constituted an expert committee probe serious irregularities in PPAs. The government would examine the criminal angle based on the committee’s reports, and appropriate legal action would be taken against those responsible, he said. 
 
Minister of Finance Buggana Rajendranath continued to blame the TDP government for distress in the state’s energy sector. 
 
“Despite adequate availability of energy from conventional sources, Mr Naidu’s purchase of renewable energy at prohibitively high tariffs has resulted in a loss of Rs 5,497 crores during the last four years, if computed on a conservative basis,” Buggana said, claiming that it was because favouritism and rampant corruption during TDP’s term. 
 

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