Sunday, June 16, 2024

Sri Damodaram Sanjeevaiah Thermal Power Station- Why involve a private company in its O&M, asks EAS Sarma

EAS Sarma, a retired IAS officer and an activist, has questioned the move by AP Government to handover the O&M of Sri Damodaram Sanjeevaiah Thermal Power Station. He said APGENCO which is working very well and it is the best bet to run the thermal power station. If the operations are given to a private company which has mines overseas under its control, the cost of production would be increased by manipulating the invoice of coal imports. He cautioned the Government not to trust a private company instead entrust the project to APGENCO. Here is the full text of the letter the former Union Power Secretary wrote to the Chief Minister of AP.

E A S Sarma

Former Union Power Secretyary



Shri Y S Jaganmohan Reddy

Chief Minister

Andhra Pradesh

Dear Shri Jaganmohan Reddy garu,

I understand from press reports that the State government is considering handing over the operation and maintenance of Sri Damodaram Sanjeevaiah Thermal Power Station (SDSTPS) to a private company. If these reports are correct, I am afraid that the decision is detrimental to the interests of the State and its consumers.

It is sad that I should raise this issue, on the same day when you are “dedicating” the 800 MW unit of Stage II of the power project to the nation!

From what I gather from news reports and other sources, the State government is considering a well known, favourite private business house, through a highly non-transparent procedure, to take over the O&M of the power station. I will not be surprised if that very same business house also owns coal mines overseas and will be providing coal from those coal mines for the power station, which has been cleared for a mix of indigenous/ imported coal. In the past, all such private groups from India supplying coal to domestic power plants were facing allegations of over-invoicing coal and making false electricity tariff claims for laundering money. There were investigations undertaken by the Enforcement Directorate and others against them. Against that background, if one of such business houses were to run SDSTPS, it is possible that the consumers of AP would be forced to pay for electricity generated from over-invoiced coal!

APGENCO is perhaps the best performing generation company in the country and the best alternative for the State would have been to entrust the operation of SDSTPS to that utility. No one else can operate the plant at higher efficiency levels.

The State government should consult APGENCO on ways and means to reduce the cost of coal supplied to SDSTPS and to enhance its operational efficiency to minimise the unit cost to the consumers, instead of handing over the plant to a private business house to permit that business house to profiteer at the cost of the consumers.

May I therefore demand that the State government drops its proposal, if any, to hand over O&M of SDSTPS to a private business house and, instead, ask APGENCO to take it over?

Handing over the O&M of SDSTPS on a nomination basis to a private party will constitute an offence under the Prevention of Corruption Act and I will be constrained to seek judicial intervention in case your government is obstinate enough to commit such an offence.


Yours sincerely,

E A S Sarma




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