YSRCP RESPONSE TO TDP’s BLACK PAPER ON POWER

YSRCP RESPONSE TO TDP’s BLACK PAPER ON POWER

The TDP released a Black Paper on the Power Sector in what
is seen as a ploy to divert the attention of the people of
the State from the black days of their 9 years rule, when
the people were fleeced at regular intervals in the name of
power tariff increases.

It is surprising that out of all, the TDP chose to issue a
black paper on power. Mr Chandrababu’s firm belief is
that people of the state have forgotten his misdeeds and
mismanagement of this important sector.

The effort of the Black Paper clearly is to target Late Dr
Y S Rajasekhara Reddy and not the present Congress
Government, which is surviving on TDP’s direct support.
Instead of making sweeping statements about the costs
of power projects going up during Dr Y S R’s regime, the
Black Paper would have done well had it mentioned specific
projects where the costs had gone up.

The Black Paper would have had some credibility had they
talked about unprecedented corruption and inefficiency
during the 10 years TDP rule, which has contributed in no
small measure for the present power crisis.

1)The three issues that are foremost in the minds of the
people of the state are:
a) Why is the state facing such unprecedented
power shortages?
b) why is the power tariff being increased at such
frequent intervals and so heftily, particularly when
the state is doing very well in terms of resources?
and
c) How is it that YSR Government managed their
five year’s rule without increasing power tariff to
any class of consumers even while supplying free
power for 7 hours to farm sector?
2)Going by the Black Paper of TDP, it looks like Mr
Chandrababu Naidu does not understand that the
present problem in the state is nothing to do with non-
availability of power capacities. There is enough power
capacity in the state. The problem is that enough coal
and gas are not available. Even if we have another
5000 MW of capacity, what will we do with it when
there is no fuel to power it?
3) It is the policy and governance paralysis of the Central
and State Governments that is responsible for the
present power crisis.
4)The next question is why is the State Government
increasing power tariff at regular intervals and so
heftily?
5)Why is Mr. Chandrababu Naidu not questioning the
State Government in his Black Paper about steep and
frequent power tariff increases, making the life of
the common man most miserable, despite massive
mopping up of financial resources of the State both in

the form of revenues and borrowings in the last four
years?
6) Does not Mr. Naidu know that the state revenues have
increased from Rs 62,000 crores in 2008-09 to Rs 1.09
lakh crores in 2011-12 and are projected to reach Rs
1.27 lakh crores in 2013-14 according to the recent
budget?
7)Why did Mr. Naidu not ask the Government in his so
called Black Paper that despite revenues increasing
by more than Rs 50,000 crores per annum in just four
years period, why the power tariff is being increased so
frequently?
8) Does not Mr. Naidu know that outside the budget, the
municipal taxes, water charges and RTC charges have
all been raised substantially in the last three years
imposing huge burden on the people of the state?
9)Is Mr. Naidu not aware of the fact that the State
Government’s borrowings have gone up from Rs 93
thousand crores in 2008-09 to Rs 1.55 lakh crores by
2012-13, which is an increase of Rs 62,000 crores in
just 4 years? Is not the State Government going to
additionally borrow Rs 25,000 cr during 2013-14?
10)
Why did Mr Naidu not ask the State Government
in his Black Paper as to what the Government is doing
with all this money gathered both as part of and
outside the budget?
11) Why did Mr Naidu not ask in his Black Paper
as to why the Government is increasing the power
tariff at such regular intervals and so steeply despite
phenomenal increase in their resources?
12)
Instead of asking these specific questions, why is
Mr Naidu beating around the bush?

13) It is clear that he does not want to offend the
present Congress Government both in the State and
Centre.
14)
Nobody is able to fathom as to why the Central
and State Governments have become so completely
non-functional.
15) For fear of being hauled up by CAG, Media,
Opposition and Courts, the Central Government
stopped taking decisions on all important issues.
How sad! Despite India’s huge endowments of coal,
the country has been forced to depend on imported
coal, which is pushing up the trade deficit. The Coal
production in the country has virtually stagnated in
the last three years because of the Government’s
lack of initiative to resolve certain very routine inter-
ministerial differences on forest clearances; with the
result many coal based projects in the country are in a
problem. The coal ministry has allotted 200 coal blocks
to private companies. The Forest and Environment
ministry promptly stopped all those projects.
16) The imported coal is twice the cost of domestic
coal even after taking into account higher calorific
value of imported coal. Coal imports were 80 million
tonnes during 2012. The FM says they will go upto 185
million tonnes in the current and coming years. Where
are the port facilities in the country to handle such
huge additional imports? Is the Indian railways geared
up for handling this additional load? What will be the
cost of power generation?
17) It is the PM who has to call for a meeting of
Ministries of power, coal, mines, railways and
forest and environment and resolve these issues.

Unfortunately, many of these projects are under CBI
scrutiny with a threat of cancellation of allotments.
18) So, the government feels that the easiest thing
is to import coal at whatever cost and pass it on to
helpless consumers.
19) Same is the case with natural gas. The Natural
gas production has been falling with each day passing.
Except Reliance Industries, none of the other three
companies that were given contracts in KG basin way
back in 2002, has produced even one cubic meter of
gas; still no action is taken against them. There have
been phenomenal delays in allotting fresh gas blocks
for exploration. With the result, the country has to
depend on imports which are 3 times more expensive
than the present domestic tariff.
20)
If we do not have coal and natural gas, how can
we expect to improve the power situation in the
country? Without power, how can we hope to grow?
21) Why is the State Government not able to get
greater supply of gas for our projects as was done by
late YSR?
22) The Black Paper issued by TDP conceals many
more facts than what it reveals about its own
performance during 1994-2004. That TDP Government
completely messed up the power sector in the state
during their 10 year period 1994-2004 is a well known
fact. There is no way they can cover it up. Why are
they persisting with the policy of confusing people by
publishing this Black Paper?
23) Is it not a fact that the then APSEB earned
operating profit in each of the five financial years
during 1989-1994?

24)
Is it not a fact that in each of the ten years period
of TDP rule i.e. from 1994-2004 the APSEB suffered
huge operating losses, which cumulatively accounted
for over Rs 20,000 cr in those ten years period?
25) Is it not a fact that it is because of this
mismanagement of the power sector that the state
revenues have gone haywire with huge accumulated
Revenue Deficits of over Rs 22,000 cr during 1994-
2004 as against a cumulative revenue surplus as on
31-3-1994 i.e. at the of 38 years after formation of the
state?
26) Is it not a fact that because of this
mismanagement of the power sector during the TDP
regime, the Asset/Liability ratio of the State for 1994-
2004 fell to 45:100 as against what was 101:100 as on
31-3-1994?
27)
Is it not a fact that the Asset/Liability ratio of the
state for 2004-09 has increased to 120:100 as on 31-3-
2009?
28) Can anybody in his right senses say that a
Government, during whose regime in each of the ten
years APSEB suffered huge operating losses despite
increasing power tariff to all classes of consumers,
including for agriculture, at regular intervals, has done
better than the earlier Government, which earned
operating profit in each and every year?
29) Is this what Mr Naidu has learnt in his post-
graduation in economics?
30)
Is it not a fact that the TDP signed a contract with
World Bank that they would hike power tariff every
year for all classes of consumers?

31) Is it not a fact that YSR Government did not
increase power tariff atleast once during the five years
period to any class of consumers despite agricultural
power consumption going up from 800 cr units in 2003-
04 to 1500 cr units per annum in 2008-09?
32)
Is it not a fact that the industrial power tariff was
75 paise per unit less in 2009 than what it was in 2004?
33)
Is it also not a fact that it is not only the power
tariff that was not increased even once during 2004-
09 but also the VAT rate, RTC charges, Water charges
and Municipal taxes were not raised even once during
2004-09?
34)
Is it not because of better power supply at highly
reduced rates that the overall economic growth that
the state achieved during 2004-09 was as high as 9.07%
as against the annual growth rate of 5.7% during the
earlier TDP regime?
35)
Is it not because of various favourable initiatives
taken by YSR Government, particularly in power sector,
that the manufacturing sector in the state recorded
a growth rate of 13% per annum in real terms during
2004-09 against a meagre 8% growth rate during the
TDP regime?
36)
Is it not for the same reason that the agriculture
sector recorded an annual growth rate of 6.87% during
2004-09 as against 3.25% growth rate during the earlier
TDP regime?
37)
It is surprising that in the so called Black Paper,
the TDP is finding fault for buying power from private
sector. What a joke? Is it not a fact that Mr Naidu
never lost an opportunity to project himself as the real
champion of Reforms and Privatization during his nine

years term?
38)
Who has dabbled with the private sector---was it
Mr Naidu or Late YSR?
39)
Who has gone to Davos every year in pursuit of
private investments?
40)
Can Mr Naidu say with confidence as to how much
of the power capacity added in the state during his 9
years rule was from APGENCO?
41) Why is he trying to mislead that the present
power crisis in the State is due to favouring the private
sector during YSR regime when the fact remains that it
was Mr Naidu who actually favoured the private sector
for obvious reasons?
42) Which Government signed hurriedly those
infamous 23 midnight MOUs with various private firms
who were not even income tax payees and who did
not even have on 17/18th Feb 1995 for an additional
capacity of 10,000 MW with all sorts of people?
43) The whole nation was aghast at this most
audacious act of signing MOUs in the midnight ignoring
the advice of the then power Secretary Dr E A S Sarma?
Dr Sarma felt humiliated and went away to Delhi,
where he was made Union Power Secretary.
44) Even more shocking was the fact that APSEB’s
Muddanur expansion project that was finalized in
favour BHEL in 1994 was cancelled and allotted to a
private firm as part of 23 mid night MOUs?
45)
Why did the TDP Black Paper not write about this?
46)
Is it not a fact that the TDP Government signed
PPAs for Short Gestation Power projects with 6 private
developers for 8 naphtha based power projects on 31-
3-1997 at different fixed tariffs ranging from 97 paise

per unit to 135 paise per unit?
47) Did that not become biggest scandal with Mr
Muddukrishnama Naidu along with other political
parties making a big issue out of this?
48) Does not the credit for forcing the TDP
Government to fix a uniform fixed tariff of 97 paise for
all the projects go to late Dr Y S R?
49)
ICICI evaluated all the bids for the short gestation
power projects and awarded marks for each of the
promoters on the basis of their past performance,
financial strength and experience and the TDP
Government allotted these projects on this basis after
taking into cabinet.
50) What happened latter is a completely different
thing. All the promoters were changed. The locations
were changed. All this happened without going back to
Cabinet for very obvious reasons. The TDP Member Mr
M V V S Murthy suddenly descends from somewhere
and is allotted one of the short gestation power
projects without following any rules and regulations.
51) Was it not suicidal for the state to promote
around 2000 MW power projects on naphtha basis?
52)
Is it not a fact that on severe pressure from the
entire opposition, the TDP Government agreed to
finally change the fuel?
53)
The opposition clearly said that there was no gas
availability in KG basin and therefore they advised the
Government to change the fuel from naphtha to coal.
54)
It was not just the opposition; even experts have
cautioned the TDP Government against going for gas
based projects. Why did the TDP Government go ahead
with gas as fuel despite the GAIL not coming forward to

accept any penalty for non-supply of gas?
55) Is it not because of this goof-up that the
state Government is unable to bring pressure on
Government of India for compensation for non-supply
of gas? Is this not the single biggest reason for the
present power crisis in the state?
56)
Is it not a fact that the TDP Government, in a most
brazen manner, gave away the highly profitable inter-
state hydro project on Balimela to the TDP Politburo
Member Sri M V V S Murthy?
57)
It was Mr Chandrababu who allowed Rs 5 crores
per MW to private projects like GVK and Spectrum
while the Public Sector APGPCL implemented the gas
based power project at just Rs 2.7 cr per MW in 1997.
58)
Surprisingly, the TDP feels that it was the late YSR
and the Congress party that have dabbled with private
sector.
59) Having done all these favours to private firms,
Mr Naidu talks as if he is against privatization and
corruption of others? What is the credibility of his
Black Paper? Is Mr Naidu ready to face CBI enquiry into
all the above misdeeds?
60)
In any case, the TDP Black Paper, which is full of
half truths and lies does not serve any purpose.

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