Vijayawada: The possibility of debt-ridden Andhra Pradesh facing a penalty of Rs 2,900 crore, and the impact backtracking on the deal with Solar Energy Corporation of India (SECI) may have on the business climate, are among issues weighing on Chief Minister Chandrababu Naidu’s mind in the wake of the Adani Group indictment, ThePrint has learnt.
Naidu’s Telugu Desam Party (TDP) is treading cautiously in reacting to US prosecutors’ indictment of Adani Group executives, among others.
In its complaint, the US Securities Securities and Exchange Commission (SEC) alleged that, in August 2021, Gautam Adani “met personally” with the chief minister of Andhra Pradesh—Jagan Mohan Reddy, who held the office then—and that, “at or in connection with that meeting, (Adani) paid or promised a bribe to Andhra Pradesh government officials”.
This, said the complaint filed in a district court in the US, was allegedly done to “cause” state government officials to “enter into power supply agreements” with the SECI.
Shortly after the purported meeting, Andhra Pradesh agreed to buy power from SECI, it added. The US Department of Justice indictment naming Adani, too, refers to Rs 1,750 crore being offered as a bribe to a “high-ranking government official” of Andhra Pradesh.
A week since the unsealing of the indictment, which accused Adani and associates of offering a bribe to YSRCP chief Jagan Mohan Reddy, the Naidu-led NDA government in Andhra Pradesh remains non-committal on the future of the mega deal involving purchase of 7 GW of solar power. The state government is yet to launch an official probe.
P. Narayana, a senior minister in the Naidu government, in charge of municipal administration and urban development, told ThePrint that the chief minister is “seriously contemplating the matter” and that an “appropriate decision” will be taken in due course.
State Finance Minister Payyavula Keshav, who was chairman of Andhra Pradesh Legislative Assembly’s Public Accounts Committee (PAC) and had flagged concerns over the SECI deal in 2021, said that the PPAs are under review.
While top ministers including Naidu himself have said action will be taken if the allegations—that Naidu said “damaged” the state’s brand image—turn out to be true, experts and civil servants ThePrint spoke to said doing away with the deal may not be easy.
Naidu has taken a very measured response, while apparently exploring all options since making a decision on the future of the deal cannot be easy or quick, said a state government official who did not wish to be named.
“First, the SECI agreement has clauses requiring AP to pay penalties if it chooses to scrap the agreement. This roughly comes to Rs 2,600 to 2,900 crore—that is, six months’ energy charges. Some transmission charges would have also applied if supply had commenced by now,” a senior official in the Andhra Pradesh Energy Department told ThePrint.
The white paper on the state’s power utilities released by Naidu in July claimed the 25-year deal with SECI would lead to an additional burden of Rs 3,850 crore per year on the state’s finances. Under the agreement, signed in December 2021, supply of solar power to Andhra Pradesh should have commenced in September 2024.
But according to the energy department official quoted earlier, “Till now, we (Andhra Pradesh) have not received a single unit nor have we paid a single paisa.”
For Naidu, an even bigger concern is the dent cancelling the deal would make on the ‘business-friendly image’ of Andhra Pradesh the TDP has been trying to project.
Speaking in the assembly Friday, Naidu said, “More facts have to emerge, we are assessing every aspect. Governments should be accountable to the public. Action on dubious deeds should serve as a deterrent for future governments too.”
“Jagan government cancelling 23 PPAs (power purchase agreements) five years back caused severe harm to industry outlook/sector at large,” said a second state government official, requesting anonymity. Adding, “Industrialists showing interest in AP were repelled by such actions. Not just renewable but the overall industries sector suffered. So, Naidu is right in taking time, assessing the pros and cons, legal factors too.”
Not long after he assumed office in June 2019, Jagan had cancelled 2,132 MW of PPAs involving 23 solar projects by nine producers. The renewable energy sector was riled by the decision. The central government also reprimanded Jagan and advised him to reconsider the decision, said P.V. Ramesh, former IAS officer, who was part of the Jagan CMO.
“Except considering the immediate political benefits or consequences, there is no urgency for Naidu to go on an onslaught against Jagan with probes,” a third government official told ThePrint.
Meanwhile, in a move that adds to the pressure on Naidu, his Telangana counterpart Revanth Reddy this week declined a Rs 100-crore endowment from the Adani Group for its Young India Skills University in Hyderabad. Reddy’s decision came close on the heels of BRS leader K.T. Rama Rao’s remarks that the Congress government in Telangana entered into deals worth Rs 12,400 crore with Adani Group. Alleging large-scale corruption, Rao sought to know the “size of commissions” paid to government heads for these deals.
“We don’t want any controversies,” Reddy told reporters Monday in Hyderabad, responding to charges levelled by Rao. While Revanth was under pressure with BRS questioning the contrast between his government and Congress leader Rahul Gandhi’s stand on Adani Group, in the case of Andhra Pradesh, TDP leaders said Modi’s ties with Gautam Adani are also weighing on Naidu’s decision-making, given that both parties are NDA allies.
(Edited by Amrtansh Arora)
Also Read: Tamil Nadu among states where Adani allegedly offered bribes, but AIADMK is quiet. Here’s why
