CM rules out judicial probe into PPAs

By Our Special Correspondent

HYDERABAD, MARCH 3. The Opposition demand for an enquiry by a sitting Judge of the Supreme Court into the Power Purchase Agreements signed for short gestation power projects such as Lanco Kondapalli Power and Konaseema Oakwell Limited was rejected outright by the State Government in the Assembly today on the ground that the demand was motivated by ``political malice and throwing mud.''

The Chief Minister, Mr. N. Chandrababu Naidu, asserted that the rate of 95 paise towards ``fixed cost'' was the lowest in the country and the PPAs signed were cited as ``model'' for other power projects in the rest of the country. ``The Congress (I), whose Government in Maharashtra signed the Enron deal which completely devastated that Government today, cannot criticise us for getting power at the most competitive rate. Since yesterday, we have been seeing the spectacle of the Leader of Opposition, Dr. Rajasekhara Reddy, repeating what he has said in earlier debates to hold the Assembly to ransom by determining its agenda. We are not agreeing to any enquiry or to cancel agreements already entered into,'' Mr. Chandrababu Naidu asserted.

Dr. Rajasekhara Reddy said that the Chief Minister was ``afraid'' of an enquiry ``since it would reveal his corruption in the deal. If the Government is so transparent as he claims, why doesn't he order an enquiry and clear himself of all the charges? Then I will stand up and apologise to the whole nation for making the charge,'' he said.

Dr. Rajasekhara Reddy yesterday alleged that the Lok Sabha Speaker, Mr. G. M. C. Balayogi, exerted influence in favour of Konaseema Oakwell project. Dr. M. V. Mysura Reddy of the Congress (I) demanded cancellation of all PPAs signed earlier because some of the IPPs that bid for projects individually merged later. Mr. Asaduddin Owaisi of the Majlis Ittehadul Muslimen, led his 4- member team in a walk-out, alleging that the Government had shown undue favour to Lanco group while Mr. N. Narasimhiah of the CPI (M) walked out demanding a judicial enquiry. Congress (I) members, however, remained in the House, protesting against the deal.

The issue of short-gestation power projects came in the form of Rule 304 motion, and was debated for two days. The Chief Minister said that PPAs provided for the developer to contribute 11 per cent while other promoters could contribute 19 per cent to equity, and mergers were provided for. Lanco achieved its financial closure before the Government ruled that the ``fixed cost'' should be 95 paise only per unit. Lanco had a ``fixed cost'' of Rs. 1.23 and variable cost of Rs. 2.87, with the overall cost per unit coming to Rs. 4.10. The cost was high because Naphtha cost Rs. 16,000 per tonne. ``There is no politics in this, and many of these promoters and contractors are Congressmen, but we are looking at the projects as necessary for the development of the State, and I have personally represented to the Centre to provide a gas pipeline to Lanco. The cost of power will substantially come down when the pipeline is laid by July this year,'' he said.

Mr. Asaduddin Owaisi said that the cost of power purchased by the Transmission Corporation from private IPPs was Rs. 128 crores higher this year compared to last year and he asked where the need was to purchase 557 million Units from Lanco when power was available at a cheaper rate from the eastern grid.

Mr. Chandrababu Naidu said some Congress Chief Ministers were in touch with him, asking him to form a ``group of reforming States'' so that they can exert pressure on the Centre to take up pro-reform policies. Mr. T. Devender Goud, Home Minister, said he met Mr. Digvijay Singh, Madhya Pradesh Chief Minister, in Delhi yesterday at an Inter-State Council meeting, and Mr. Singh said that Mr. Chandrababu Naidu should have attended the Power Ministers' conference in Delhi to push forward the reformist agenda because AP had gone ahead in this field.

``When he is talking in this strain, Congressmen in Andhra Pradesh are bent on politicising every single issue,'' he added.

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Section  : Southern States
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