YS Jagan Mohan Reddy Government’s Decision to Review Power Purchase Agreements (PPAs) had affected the investments in Renewable Energy sectors across the country. The Chief Minister did not listen to the Central Government even though the latter tried to dissuade him from doing that.
To avoid such acts in the future, the Union Government had decided to create a tribunal headed by a retired judge to deal with contract issues in case of violations like in the case of Andhra Pradesh. The Government will create the necessary legal framework to recover the contract value of money owed, even by attaching property.
The draft for this amendment is almost ready and will be tabled in the Parliament very soon. It is said that AP’s decision to review the PPAs has stalled grounding of new power projects proposed to add close to 3,310 MW both in private and government sectors.
Wind Power Projects that were supposed to add about 2400 MW capacity by 2019-20 with a whopping 14,400 Crore investments were scrapped. The investors are worried about the sanctity of the legal contracts if the subsequent governments do not honor them and so are skeptical about investing in Andhra Pradesh. The repercussions are already being felt in the projects of the other states as well.
