A closer look at those behind PPAs

A closer look at those behind PPAs
A closer look at those behind PPAs

Government officials have begun a process to fix responsibility and nail those responsible for drafting and adding lopsided terms to power purchase agreements (PPAs) with independent power producers (IPPs) under the previous SAD-BJP government.

Despite having three power plants, the Punjab Power Ministry is reviewing PPAs and also investigating the role of some officials who signed these PPAs. Punjab’s AAP government is about to complete its first year in office.

As part of the run-up to the election in 2021, the then government presented a ‘white paper’ on power purchase agreements (PPAs).

In an interview, Power Minister Harbhajan Singh said the government and power sector experts are studying all PPAs. In the last two decades, we have reviewed all PPAs signed. It will be legal to annul the ones that are financially unviable and anti-people. As a result of that action, officers who ignored the financial viability will face the consequences,” he said.

“The government must act against officials who draft such PPAs that ensure Punjab continues to pay hundreds of crores without any guarantee of power, even during peak times,” said a senior official of Punjab State Power Corporation Limited (PSPCL).

The flawed PPAs made by “certain officers” continue to bleed PSPCL and the state’s power consumers by crores, said All India Power Engineers Federation spokesperson VK Gupta.

There was such a rush on the part of the then government to finalize the PPAs with private generators that they ignored the guidelines of the Centre. The tenders were finalized without considering the source of coal supply. It was assumed that coal had a higher gross calorific value (GCV) without knowing the actual source of coal supply. As guidelines, GCV and coal rates in state thermal plants should have been used,” he said.

Rather than finalizing the source of coal for these private power plants, the rate of coal and its transportation was assumed to be from the nearest mine in order to keep the levelised cost below Lehra Mohabatt and Ropar thermal plants.