Congress questions Gujarat's decision to form panel to resolve power project issues, says state trying to favour companies

New Delhi: The Congress on Wednesday questioned the Gujarat government's decision to form a panel for resolving the issues faced by imported-coal-based power projects, alleging it was being done to favour select business houses and would adversely affect consumers in several states.

Addressing a joint press conference, Congress leaders Jairam Ramesh and Shaktisinh Gohil alleged that the Gujarat government's 3 July, 2018 notification was in violation of the last year order of the Supreme Court that "had shut the door to relief to these companies" which wanted to raise power tariff.  "This is another example of crony capitalism and of the 'suit-boot sarkar'. This is not just 'suit-boot' but is 'suit-boot-loot'," Ramesh said, accusing the BJP of pursuing crony capitalism.

Representational image. Reuters

Representational image. Reuters

They said the move is in clear violation of the Supreme Court orders passed last year, in which the claim these companies was rejected by the court after deliberating for years.
Giving details, Ramesh said in 2007 when Narendra Modi was the chief minister of Gujarat, four companies signed power purchase agreements (PPAs) with Gujarat Urja Vikas Nigam Limited (GUVNL) for the purchase of power at a fixed rate between Rs 2.4 to Rs 2.8 per unit.

The companies were to supply power for 25 years under the pacts signed, but they sought revision of tariff rates after a few years, he said, adding that their pleas were rejected by the Gujarat Electricity Regulatory Commission and the Central Electricity Regulatory Commission as well as the Appellate authority.

Ramesh said the companies then moved the Supreme Court, which on 11 April, 2017 gave its final verdict of 55 pages, rejecting their pleas, saying there is no case and the rate of power would be the same as per PPAs signed in 2007.

"Since Supreme Court has given a final verdict and there is no other way tariff can be revised upwards, the Gujarat Government issued a notification on 3 July, 2018, citing central government meetings to set up a three-member committee," Ramesh said, claiming the step was taken to benefit these companies. "This is a clear violation of the Supreme Court's 11 April, 2017 verdict and a gift to some select industrialists," Ramesh said.

"The prime minister has claimed that his 'neeyat' (intention) is clean. This clearly indicates that not just his policy is wrong, but the intention is also in doubt," Ramesh alleged The four PPAs were signed with the Gujarat PSU include two of Adani group for 200 MW power, one of Tata group for 1800 MW power and another of Essar group for 1,000 MW.

These power producers have been embroiled in a long-running dispute with state power company seeking higher tariff on the grounds that their input costs had gone up due to rupee devaluation and higher costs of coal imported from Indonesia, owing to a regulation passed by the Southeast Asian nation.
The apex court, however, did not agree with the contentions of these firms.

Gohil alleged that the government is trying "to benefit the companies to the tune of Rs 88,000 crores", the burden of which would be borne by power consumers of the states of Gujarat, Maharashtra, Punjab, Haryana.

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Updated Date: Aug 23, 2018 07:58:38 IST

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