APSFC division will not progress until AP withdraws court cases, says Telangana

Finance Spl CS participates in virtual meeting convened by MHA

The Telangana government has asserted that the bifurcation of assets and liabilities of the erstwhile AP State Finance Corporation cannot be made until the Andhra Pradesh government withdraws cases it filed in the court.

Bifurcation of the corporation has been pending as the AP government, on the strength of its members on the board of directors, passed a “unilateral” resolution on its demerger. The Telangana government took strong objection to the manner in which the demerger was approved when there were no members on its behalf on the board and asked the Central government not to approve the demerger plans.

The issue figured in the virtual meeting conducted by the Ministry of Home Affairs joint secretary with Finance Secretaries of the two Telugu States -- Telangana and Andhra Pradesh -- on Thursday. The MHA joint secretary was informed about Telangana’s request made way back in May 2016 for reconstitution of the APSFC board invoking its powers under Section 71(b) of the AP Reorganisation Act, 2014 which is still pending.

The neighbouring State had approached the court and obtained status quo orders against resumption of 235.34 acre land allotted to the SFC for violation of allotment conditions. There was also a dispute over sharing of SFC building in Nanakramguda. The building was an operational unit and not headquarters as per the Reorganisation Act, the State averred adding unless the three issues are resolved, there could not be any progress in bifurcation of the APSFC.

The dispute over the power dues between the two States too figured prominently in the close to two-hour meeting with Telangana asserting that total payable amounts relating to power dues by each States should be put together instead of piece meal settlement. The State explained how it had incurred huge expenditure on account of purchase of high cost power owing to unilateral cancellation of power purchase agreements signed in the united State by the AP government.

This was in addition to the deprivation of low-cost hydel power from Sileru project, forcing the Telangana power utilities to opt for high cost power, and consequent huge financial costs. The government was firm that if all the dues, including the debt servicing of Kurnool and Anantapur districts and costs incurred on account of high cost power purchase are considered, AP is due to the tune of ₹12,534 crore after settling the dues payable to APGenco and not the other way round.

The State had however expressed willingness to settle the dispute through mutual agreement between the two States provided APGenco withdrew the case it filed in the court. Removal of anomaly in tax matters was another issue that figured in Thursday’s meeting with Telangana standing firm that there was no need for amending the Reorganisation Act after seven-and-a-half years of operation.

Any step in this direction would entail endless litigations and further complicate the settled matters, the MHA joint secretary was told. The MHA official agreed with the State’s views and agreed to delete the issue from the list as it was not a bilateral issue.