State stands to gain from power deals, says CM

By Our Special Correspondent

HYDERABAD, MARCH 3. The Chief Minister, Mr N. Chandrababu Naidu, defended promotion of the Konaseema-Oakwell power plant, the allotment of natural gas to three other short-gestation projects, the purchase of power at higher price from Lanco's Kondapalli unit, and all Power Purchase Agreements (PPAs) with IPPs (independent power projects), saying that all of them have been taken up ``in the interests of the State.''

Replying to a four-hour high voltage debate on the loss suffered by the State due to the ``high costs'' allowed under these projects, transacted under a motion tabled by 42 members from all parties in the Assembly on Saturday, Mr Naidu also rejected the Opposition's demand for a probe by a sitting judge of the Supreme Court or a House Committee on the ground that the allegations were baseless and politically motivated. The MIM and CPI(M) staged a walkout protesting at his ``obdurate''" stand.

The debate was marked by procedural wrangles and heated exchanges indulged in by Congress and Telugu Desam members which towards the end was marked by a confrontation between the Leader of the Opposition, Dr Y. S. Rajasekhara Reddy, and the Chief Minister. Dr Reddy challenged the Chief Minister to adjourn the House and come out to verify if farmers were receiving 9-hour power supply, and the latter threw a counter-challenge asking the former to find out at least one State in the country where fixed (capital) cost was 98 paise per unit as achieved under the aforesaid projects.

Mr Chandrababu Naidu clarified that Konaseema and Oakwell were two among the eight naptha-based short-gestation projects cleared by the State. With abundant availability of natural gas later in the Krishna-Godavari basin, the Government converted all of them into gas-based units in which unit cost would be low, increasing the total installed capacity under this category to 2,38 MW from the original 1,750 MW. Subsequently, Konaseema secured .9 MCDC gas allocation while Oakwell, not being able to get the benefit, offered to join with Konaseema. The Chief Minister also justified their merger.

While the variable cost under the project with furnace oil as fuel as originally planned worked out Rs 2.87, it might come down to mere 98 paise now with the availability of the cheaper fuel like gas, like in other gas projects. The Chief Minister, however, did not disclose if it had received a communication from the Lok Sabha Speaker, Mr G. M. C. Balayogi, spurning the offer to locate the plant in his Amalapuram constituency. Regarding the Lanco plant, the Chief Minister, said, this also, though conceived with naptha as fuel, was converted into gas-based. The present price at Rs 4.10 (Rs 2.87 of variable cost and Rs 1.23 of fixed cost) was expected to come down to a little above Rs 2 by August from when the plant would be run on gas. He denied that he favoured anybody much less the Congress MP, Mr P. Upendra, as alleged by Dr Rajasekhara Reddy.

The Chief Minister said the unit cost in IPPs was Rs 1.75 on an average. The fixed cost under all short-gestation projects was 98 paise as of now, but it worked out to 95 paise under GVK II (expansion) and Spectrum (Kakinada) as these two units had already established infrastructure. He made it clear that gas allocation was made to whoever came first and gave an undertaking to begin commercial production as per deadline. When asked by Dr M. V. Mysoora Reddy(Cong.) as to why the Government did not give allocation to the Andhra Pradesh Gas Power Corporation which specified the fixed cost at 80 paise, or the AP Genco, the Chief Minister retorted,``don't go by records" and to verify from the field.

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Section  : Southern States
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