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Saturday, July 24, 2021

Punjab government seeks legal opinion on if it can renegotiate/annul PPAs

The government is reviewing all the 122 PPAs now. A senior functionary of the government said, “As the first step, we have sought legal opinion on the five PPAs."

Written by Kanchan Vasdev | Chandigarh |
July 9, 2021 4:47:04 am
Punjab CM Capt Amarinder Singh (File)

THE PUNJAB government has sought legal opinion from Advocate General Atul Nanda on whether the Power Purchase Agreements (PPAs) of two private thermal plants — GVK and Damodar Valley Corporation — and three NTPC-run power plants could be renegotiated. 

The move comes five days after the Chief Minister Capt Amarinder Singh had announced that the PPAs signed by the erstwhile SAD-BJP government were already under review and his government would soon announce its legal strategy to counter these agreements, which had put an atrociously unnecessary financial burden on the state.

He had said that out of the 139 PPAs signed during by the then SAD-BJP government, 17 were enough to cater to the state’s full power demand, adding that “the remaining 122 for 1,314 MW of expensive power were inexplicably signed, putting unnecessary financial burden on the state”.

The government is reviewing all the 122 PPAs now. A senior functionary of the government said, “As the first step, we have sought legal opinion on the five PPAs. Of these, two are with private players including the GVK and Damodar Valley Corporation. We will take action after the AG gives us the legal opinion.” 

The AG had, in his earlier opinion on all PPAs two years ago, stated that all of those were renegotiable. It remains to be seen whether the AG gives a similar legal opinion on these five also. 

The government has also sent all 122 PPAs to the Congress high command asking them to get independent legal opinion by engaging senior lawyers in Delhi. “We want them to get those PPAs examined on their own. If they think there is no financial liability of renegotiating those, we will go ahead and cancel them. But if we are going to lose the legal battle, besides spending crores in courts, there is no point in canceling them,” the functionary said. Renegotiation of PPAs was one of the 18 points given to Amarinder by the Kharge committee. General Secretary in-charge Harish Rawat had stated that the CM had already told them that the PPAs were under review. 

As per the PPAs with these units, the government has to purchase every unit of power from them between Rs 6 to 14 every unit. The fixed charges given to these thermal power plants are the contentious issue. 

Sources in the government said it was not easy to cancel the PPAs but renegotiation could be done. The decision will be taken after the legal opinion. 

The government has been under fire on the issue of PPAs, cancellation of which was a pre-poll promise of Congress. But even after 4.5 years of the government, no action was taken. Party leader Navjot Singh Sidhu has also been turning the heat on the government on the power issue. 

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