CM’s Unethical Decision Not To Honour Power Purchase Agreements

One of the most contentious issues that cropped up between the two states immediately after bifurcation was honouring the existing power purchase agreements. As per the AP Reorganisation Act, power stations are to be divided between the states based upon the location. But the power purchase agreements already entered into for those plants which are already functioning and under construction need to be honoured. It was a known fact highlighted by Sri Kiran Kumar Reddy that consequent on division of the state ,Andhra Pradesh would be power surplus and Telangana power deficit. This was because most of the generation units are located in Andhra area. That’s why the reorganisation act specifically mentioned that the power purchase agreements will have to be honoured by both the states. At a political level the Andhra Pradesh government decided not to honour these power purchase agreements. I tried to convince the Chief Minister stating that legally we were bound to honour them but he said the decision was already taken. This one action of the AP government which was not correct and also does not stand any test of reasonableness led to the biggest gap of confidence between the two governments. Perhaps the thinking of the AP Chief Minister’s could be that the government in Telangana would collapse if power is not made available to the agriculture sector. No such thing happened. The Telangana government survived, purchasing as much power as required at exorbitant rates. They were able to tide over that particular season and then concentrate on the sector to become independent of Andhra Pradesh in terms of availability of power for the state. The role played by Sri Prabhakara Rao who was handling this sector in Telangana needs a special mention in this regard.

Soon after this incident, but I suppose independent of this, the Telangana government started putting barricades in the secretariat demarcating the areas for Andhra Pradesh secretariat and Telangana secretariat. Since till then employees were freely moving around they felt inconvenienced by this action. I thought of bringing it to the notice of Mr Harish Rao, minister in the Telangana cabinet. I rang him up, mentioned the barricading and asked him whether there is need for the barricades which may create avoidable gap between employees. He replied with a question whether the action of the AP Chief Minister in not honouring the power purchase agreements was in the direction of better relationship. I did not have an answer.

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