The Andhra Pradesh power utilities have issued notice to the GVK-Jegurupadu gas-based power project management on Friday, informing them about the intended buyout of the 445 MW project.
The power purchase agreement with what is touted as the private-owned Independent Power Producer project in India has come to an end in June this year, and according to the PPA provisions, decision for a buyout is taken by the Energy authorities, based on evaluation by a consultant. The PPA for 18 years was signed in 1997.
CMD of APTransco K.Vijayanand has said there will be a notice period of 60 days during which the details of the buyout will be thrashed out between the AP Discom and the company authorities.
As per the agreement, the government has the option of either continuing the PPA or buying out the plant, or allowing the producer to function independently.
The buyout notice has the potential to rake up a controversy in the context of State bifurcation. In view of the Telangana Discom bearing part of the fixed costs, it is yet to be seen if they will remain mute spectators to the buyout or stake their claim for the affordable power option.
While Mr.Vijayanand made it clear that AP singly has the option of buyout because the plant fell into its geographical territory, it is to be remembered that the AP Reorganisation Act has allotted only State-owned plants based on their location, and not the private projects and buyouts. Telangana energy authorities are clearly left on the back-foot in this case.
