Opposition targets TN govt's MoU with Adani Group

Says state govt will lose Rs 23,000 crore at prices quoted by Adani Group

Political parties in Tamil Nadu have citicised the Tamil Nadu goverment's decision to procure solar-based power from Adani Group for Rs 7.01 per unit. 

The Opposition has alleged that the state's decision to procure power for 25 years will result in Rs 23,000 crore loss.

The government, however, has said that the allegations are baseless, adding that the rates are fixed by TNERC. 

DMK treasurer M K Stalin last week asked Tamil Nadu Electricity Minister Natham Viswanathan why the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) is planning to buy solar power from the Adani Group at Rs 7.01 per unit when wind (Rs 3.50 per unit) and thermal power (Rs 4 per unit) is available at cheaper rates.

An email sent to Adani spokesperson for comment did not elicit response.

Early this month, Adani Group signed a MoU with the Tamil Nadu government to set up a 648 MW solar plant at an investment of Rs 4,356 crore. As per the power purchase agreement (PPA), TANGEDCO will pay Rs 7.01 per unit to the Adani Group.

Stalin alleged that Adani Group while bidding in the recently concluded bids for 300 MW in Madhya Pradesh had quoted a price of Rs 6.049 per unit. The company did not win the bid, which went to Sky Power for Rs 5.051 per unit. But he added that this was almost Rs 2 lower than prices offered by Tamil Nadu.

Calling for a white paper on the deal, Stalin said, "Comparing the quotes provided by Adani group to MP and TN reveals that TANGEDCO will incur a loss of Rs 7.76 crore per day. If the cost as per MOU is compared with the price offered by the other organisation that has been selected by the Madhya Pradesh govt, the loss incurred by TANGEDCO will escalate to Rs 12 crore a day."

Pattali Makkal Katchi (PMK) founder S Ramadoss too questioned the need to pay Rs 7.01 per unit for the project. The purchase price of solar energy had already come down to Rs 5.86 per unit and would further go down to Rs 5 per unit, he added.

Tamil Nadu BJP leader Tamilisai Sounderarajan asked why Tamil Nadu did not take the 'bidding' route, which would have yielded a better deal, adding that the state should explain the rationale behind the deal. 

"Despite having lower bidders and tenders, the government has signed the agreement with Adani Group to purchase power at a higher rate,'' she alleged.

Tamil Nadu Congress President EVKS Elangovan has alleged that the state government would incurr a loss of Rs 12 crore every day due to to the MoU with Adani. 

Denying all allegations, Electricity Minister Viswanathan said that the state had set a target to add 3,000 MW through solar and TNERC in its order, dated September 12, 2014 order number 7/2014, had fixed the tariff at Rs 7.01 per unit.

TANGEDCO doesn't have any rights to fix the tariff, only TNERC has the right, he added.

Responding to the allegation that the state did not encourage small companies, the minister said so far the state has signed MoUs with 43 companies to procure 1,214 MW of solar power. Before entering into an agreement with Adani, the state has signed deals with 31 small and medium solar farms to procure 436 MW of power.

About the prices, the Minister said in no states solar power is procured for Rs 5.40 per unit.

He said that the Central Electricity Regulatory Commission has fixed rates at Rs 7.04 per unit for the state for 2015-16, Gujarat at Rs 8.97 per unit in 2015, Bihar at Rs 7.87-8.72 per unit in 2014-15 and Uttar Pradesh at Rs 7.02-8.60 per unit for 2015-16.

The allegation that if the power is procured for 25 years the state will loose Rs 23,000 crore is baseless, said the minister.