White Paper: Power sector incurred losses of Rs 1.29 lakh cr during YSRCP regime, alleges Naidu

Naidu attributed the losses incurred by the sector to delay in commissioning thermal power plants and Polavaram Hydro Electric Project

By Newsmeter Network  Published on  9 July 2024 2:20 PM GMT
White Paper: Power sector incurred losses of Rs 1.29 lakh cr during YSRCP regime, alleges Naidu

Amaravati: Andhra Pradesh Chief Minister N Chandrababu Naidu on Tuesday blamed the previous YSRCP government for pushing the power sector into losses to the tune of over Rs 1.29 lakh crore.

Releasing a white paper on the status of the state’s power sector here, the CM said while the tariff burden on consumers was Rs 32,166 crore, rise in debts of AP power utilities stood at Rs 49,596 crore and losses owing to inefficient governance was Rs 47,741 crore.

“We have introduced power sector reforms 1.0 and 2.0, now we need reforms 3.0 to transform the sector for empowering the society,” said Naidu, addressing a press conference at the secretariat.

He noted that power sector reforms 1.0 and 2.0 were executed during the earlier TDP governments.

As part of energy sector reforms 3.0, the CM said he has to address legacy losses of over Rs 1.29 lakh crore, instill investor confidence, rebuild brand Andhra Pradesh and provide quality and reliable power supply at affordable rates, obviating power cuts in a rapidly transforming sector.

Naidu attributed the losses incurred by the sector to delay in commissioning thermal power plants, Polavaram Hydro Electric Project, additional impact of short-term power purchases and others.

He pegged the interest burden due to borrowings at Rs 10,892 crore and accumulated losses because of poor performance of distribution companies (DISCOMs) and Andhra Pradesh Power Development Company Ltd (APPDCL) at Rs 9,618 crore, among others.

According to the CM, the YS Jagan Mohan Reddy-led government had stripped the incentives already committed to companies by the TDP dispensation between 2014 and 2019 and renegotiated solar and wind power purchase agreements (PPAs), which led to legal challenges.

The TDP supremo accused Reddy of having burdened common people by inflating power tariff by levying fuel surcharge, true-up charges and electricity duty, which resulted in a 98 per cent rise in tariff for the poorest power consumers of up to 50 units.

“Poor consumers were impacted with higher tariff increases of 78-98 percent compared to 29 per cent for middle-class consumers. Overall, 153 lakh consumers were impacted.”

On the increased debt of power utilities from FY 2018-19 to FY 2023-24, Naidu said they rose from Rs 62,826 crore to Rs 1.12 lakh crore.

Short-term borrowings at high interest rates of 10.11 per cent to manage cashflows have imposed an additional burden of around Rs 10,892 crore in the last five years, he pointed out.

Similarly, outstanding receivables rose from Rs 12,945 crore to Rs 52,091 crore.

Further, Naidu blamed Reddy for failing to commission any new solar, wind, hybrid or storage projects in the YSRCP regime.

Noting that the state’s DISCOMs suffered lower credit ratings, he said this adversely impacted them by increased interest rates by 1.1 per cent.

Moreover, the CM alleged that shortage of power during the previous YSRCP government has impacted the state’s GSDP growth.

Citing these alleged irregularities, Naidu said Andhra Pradesh’s brand image took a beating and also dented investor confidence.

“Hence, seeking inputs and support from all the stakeholders to strengthen my hands and make Andhra Pradesh an energy hub of the future,” said Naidu, hinting at the way forward.

Inputs from PTI

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