AP overcharging power consumers?


Former Union  power secretary and activist Dr EAS Sarma says ANDHRA PRADESH POWER GENERATION CORPORATION LIMITED (APGENCO) is indirectly overcharging electricity consumers in the State as a result of imprudence in conceding higher  charges for coal import and transportation. He dashed off a letter to Genco on the subject. Text of the letter:




Shri Ajay Jain

Secretary (Energy)

Govt of AP

Dear Shri Jain,

Subject:- Import of coal by APGENCO- Declining global market price of coal- Need for prudence in finalizing coal importers

I write this in continuation of my earlier letter dated 21-2-2016 (Copy forwarded) about the high price being paid by APGENCO for imported coal. I am afraid that the transactions involved deserve a thorough investigation as APGENCO seems to be deliberately paying a price higher than the price at which CIL had offered to supply an equivalent quantity. Singareni coal, being nearer the AP power plants, is much cheaper.The financial implications of what APGENCO is trying to do are substantial and the burden imposed on the electricity consumers in the State unconscionable.

I had earlier brought to your notice the fact that what APGENCO is paying for coal transportation charges is thrice the charges being paid by its counterparts in Telangana and Tamil Nadu. I am surprised that APGENCO has been allowed to go ahead with this despite my cautionary letters!

The latest I hear about the machinations of APGENCO are far more distressing. APGENCO is trying to divert the coal it has contracted from CIL subsidiaries (Mahanadi Coalfields) to the Hinduja company. Such a diversion of coal violates the Fuel Supply Agreement (FSA) that APGENCO has entered into with the CIL subsidiaries. Also, it will force APGENCO to move away from indigenous coal in favour of imported coal, a transaction that raises serious doubts about its propriety. The moves being made by APGENCO also impose an undue additional burden on the electricity consumers.

I feel that the transactions being pursued by APGENCO in respect of (i) coal transportation contracts, (ii) coal imports and (iii) diversion of coal to Hinduja should be subject to a vigilance investigation as they are all highly dubious.

I hope the Chief Secretary and Principal Secretary (Finance) will quickly intervene and stop APGENCO’s questionable efforts to burden the consumers.


Yours sincerely,

E A S Sarma







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