New row over APPDCL’s ownership

Ownership of the AP Power Development Company Limited (APPDCL) promises to be the latest bone of contention between the two newly formed States of Telangana and Andhra Pradesh.

The transfer of equity held by former APGenco and the erstwhile AP government in the company, totally to the APGenco, is now being challenged by the Telangana Electricity Employees’ JAC.

In its detailed report over various power related issues between the two States, which was submitted to the Chief Secretary and Principal Secretary, Energy, on Wednesday, the JAC pointed out that the ownership of APPDCL cannot be treated on par with the other assets of APGenco, as it was a Special Purpose Vehicle launched for construction of generating stations.

A Government Order (GO. 25) on May 29, dealing with the distribution of assets and liabilities, said that the entire equity of APGenco and also government of Andhra Pradesh would be retained by the residual AP after bifurcation.

Besides, 17.45 per cent of the erstwhile APCPDCL’s share of equity was transferred to APSPDCL subsequent to transfer of two districts, Anantapur and Kurnool to the latter.

Earlier, the APGenco of the united State held 49 per cent of the equity in APPDCL, while the four discoms held 46 per cent, with the remaining 5 per cent held by government of Andhra Pradesh.

Three projects were proposed to be launched by APPDCL, the 2X800 MW Krishnapatnam Thermal Plant in Nellore, 3X700 MW Nedunuru gas-based generating station in Karimnagar, and one more 1400 MW gas-based station in Shankarpally, which was later brought down to 1000 MW.

However, only construction of Krishnapatnam plant could materialise, with the remaining two not crossing the proposal stage due to various reasons.

The GO.25 considered only geographical location of the Krishnapatnam plant for transferring the equity and assets to the AP Genco, in misinterpretation of the AP Reorganisation Act (APRA), the letter by TEEJAC alleged.

“Nowhere in the APRA, 2014, [is it] stated that assets and liabilities of any SPV shall be allotted on geographical basis,” it said, and claimed provisions for APGenco are not applicable to SPVs.

Instead, the letter cited Section 52 of the Act which says the government’s investments should be distributed in the ratio of population.

The letter raised a total of 19 issues pertaining to allocation of power from Central Generating Stations, non-allocation of hydel power, sharing of coal, pension liabilities, and validity of PPAs, among others.