Andhra projects in the dark as Jagan orders probe on Naidu’s decisions

A question mark hangs over the fate of several projects in Andhra Pradesh following the decision of the new government, headed by Y S Jagan Mohan Reddy, to constitute a cabinet sub-committee to review “all major policy decisions and projects” undertaken by the previous Telugu Desam Party (TDP) government.

The move, ostensibly aimed at unearthing “corrupt practices and irregularities” committed in the past and correcting the situation, is loaded with political message. And, the target is Jagan’s bete noir and predecessor N Chandrababu Naidu.

A crisp official statement quoted Jagan saying that as many as 30 agreements signed with various companies by the previous government had involved massive corruption.

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For a state that is still grappling with bifurcation blues and struggling to attract investments, the latest move will have far-reaching consequences, including delaying the ongoing projects and adversely impacting the investor sentiment.

PPAs to be reviewed

Among the projects to be reviewed by the five-member cabinet sub-committee are the power purchase agreements with private players signed by the Chandrababu Naidu government in the past.

During an official review meeting, chaired by Jagan, it was revealed that the Naidu government had made “excess payments” to the tune of Rs 2,636 crore to the producers of solar and wind power, causing huge loss to the state exchequer.

The Chief Minister also ordered that the energy department should recover excess payments made to the power companies. He also directed that legal action be initiated against the higher officials of the energy department responsible for the deals.

A separate committee would be constituted to re-negotiate with the solar and wind power producing companies. “If they do not fall in line, we shall terminate the power purchase agreements signed with them and call for fresh bids,” the Chief Minister was quoted as having told the meeting.

In fact, in his first speech after taking oath as the Chief Minister on May 30, Jagan had declared that his government would renegotiate the agreements with the solar and wind power producers which had been allowed to charge high tariff from the previous government. He cited the huge variation between the prices quoted by the developers in competitive bidding and those fixed in the PPAs.

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“The previous government had purchased solar and wind power at exorbitant rates from select companies compared to the cheaper rates quoted by others in competitive bidding,” he had said.

Significantly, the state government has ignored the Union Energy Ministry’s advice not to review power purchase agreements as such a step would result in investors losing confidence in the state. On June 6, the Central Renewable Energy Secretary Anand Kumar wrote a letter to Andhra Pradesh chief secretary L V Subrahmanyam in this regard.

Amaravati under scanner

The cabinet sub-committee will review virtually every major policy decision taken by the TDP government since the bifurcation in 2014. The most ambitious of them is the plan to build the modern capital city Amaravati. Several land deals in the capital region will come under the scanner.

However, it is not clear at this stage as to what kind of modifications the capital city project would undergo and what would be the fate of agreements with the farmers from whom 33,000 acres of land was acquired.

Terms of reference

Setting the Terms of Reference for the Sub-Committee, the government order said, “The governance during the past five years was characterised by unbridled corruption and ruthless exploitation of natural resources’ that pushed the state into the dark ages. It caused large scale displacement of poor families, needless environmental destruction, privatisation of public institutions, politicisation of the government machinery, and serious mismanagement of the financial system.”

The sub-committee has been tasked with identifying the persons or institutions responsible for malafide decisions and actions.

The government will take action based on the report of the sub-committee, the statement said. However, no time-frame has been set for submitting the report.

The government order has a set of 13 Terms of Reference and gives the sub-committee full powers to investigate any person who has been in a position of authority including ministers, bureaucrats and others.

“All major projects will be probed in great detail including Polavaram, Capital Regional Development Authority activities, ports, airports, highway projects with specific reference to the tendering process, allocation of land and insider information trading and review the procurement systems and tender procedures adopted for various projects and programmes, especially for awarding major works, goods and services contracts, public-private partnerships and allocation of public resources, particularly land, water, mines and power and determine the deviations from the established procedures, loss to the public exchequer and the beneficiaries of the pecuniary gain,” the order said.

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The sub-committee is also mandated to review major MoUs, Letters of Intent, joint ventures and special purpose vehicles executed or launched on behalf of the government either directly by the government departments or its undertakings, corporations, and subsidiaries with domestic and foreign entities.

Besides, it will review major land parcels of the government and its entities, all major mining leases granted, all investments in the power sector and infrastructure projects and approved and PPAs and Information Technology projects and omissions and commissions.

The government would also involve Anti-Corruption Bureau, Crime Investigation Department (CID) and Vigilance and Enforcement Department in the investigations to assist the sub-committee.

In a clear signal to the political opponents, the sub-committee has been asked to review the role of “important political leaders and key officials in designing and implementing policies, projects, or programmes that have had a harmful impact on the people of the state.”

The cabinet sub-committee comprises B Rajendranath Reddy (Finance), Peddireddy Ramachandra Reddy (Panchayati Raj), K Kanna Babu (Agriculture), P Anil Kumar (Irrigation and Water Resources) and M Gautam Reddy (Commerce and Information Technology). The special chief secretary Manmohan Singh will also be part of the sub-committee.

Jagan’s latest diktat comes two days after he ordered a demolition drive against illegal constructions that resulted in the demolition of ‘Praja Vedika” conference hall adjacent to Naidu’s residence on the banks of the Krishna river in Vijayawada.