The Hindu Business Line : AP Govt to review PPAs with four power cos

The Andhra Pradesh Government has called on the managements of four fast-track private power projects in the State to re-negotiate their power purchase agreements (PPAs).

The Chief Minister, Dr Y. S. Rajasekhara Reddy, said that as per the existing PPAs, the Transmission Corporation of Andhra Pradesh (APTransco) was paying an "excess amount" of over Rs 200 crore a year to GVK, Spectrum, Lanco Kondapalli and BSES power projects, compared to the amount paid to the Generation Corporation of Andhra Pradesh. The Chief Minister said that as per the subsequent PPA between APTransco and Gautami Power project, the fixed cost of power purchase was only 98 paise per unit. ``We are trying to make the four projects to supply power at 15 to 20 paise less than what has been agreed to pay for Gautami. At that rate, the State can save Rs 400 crore per annum, an amount equivalent to the cost of providing free power to the agricultural sector,'' he said.

Dr Reddy said that the PPAs have to be renegotiated even according to the report of the Comptroller and Auditor General. The State Government would face any legal problems in this respect. "We are prepared to face the legal battle even if it is as big as that of Enron," the Chief Minister said.

On the issue of Andhra Pradesh Electricity Regulatory Commission's (APERC) approving PPAs, he said that the APERC should help the common man. The Government's endeavour was to "see to it that the consumer is benefited".

The Chief Minister, who returned from Delhi on Wednesday night, said that he had met the Prime Minister, Finance Minister, Agriculture Minister, Minister for Water Resources and Civil Aviation Minister. While the Prime Minister showed special interest on development of the State, the Finance Minister had agreed to extend an helping hand for raising resources for pending irrigation projects.

Dr Reddy also sought the revival of Prudential Urban Cooperative and Vasavi Urban Cooperative banks, which were facing liquidity crisis from March 2003.

The Chief Minister also urged the Union Agriculture Minister to introduce a comprehensive seed act in the country to curb the sale of spurious and poor quality seed to the farmers. He also pointed out that the crop insurance premium for commercial and horticultural crops was very high and he wanted the Centre to ensure that the premium would not exceed two per cent of the value insured.

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