If reports in the national media are to be believed, the Chandrababu Naidu-led government in Andhra Pradesh is considering terminating the power purchase agreement (PPA) signed with the Adani group-linked Solar Energy Corporation of India (SECI) during the Y.S. Jagan Mohan Reddy government in 2021.
According to these reports, the Naidu government is reviewing the agreement's files to assess the possibility of canceling the deal. This development follows a New York court indictment of Adani Group chairperson Gautam Adani and seven others for allegedly paying â¹1,750 crore in bribes to the then-government head.
State finance minister Payyavula Keshav reportedly confirmed that the government is "digging into all internal files" related to the deal.
"We will also examine the possibility of canceling the contract," Keshav stated, emphasizing that the government is closely investigating the matter.
However, sources indicate that scrapping the PPA with SECI may not be straightforward due to potential legal complications.
"The agreement spans 25 years and likely contains numerous clauses that could hinder termination," a source explained.
Moreover, while the PPA is officially with SECI, the deal is effectively tied to Adani Energy. Observers speculate whether Naidu would risk canceling a contract with Adani, given his close ties to Prime Minister Narendra Modi.
"Unless the Modi government decides to act against Adani following the U.S. indictment, Naidu may hesitate to take unilateral action. However, renegotiating the price could be a possibility," sources suggested.
It is reported that the Naidu government is currently seeking legal advice on how to handle the power purchase agreement, as the chief minister faces political pressure to sever ties with Adani. Keshav is already engaged in a legal battle with SECI over the PPA.
"The cabinet will make a decision after weighing the pros and cons of terminating the contract. Still, it remains to be seen whether Naidu would risk antagonizing Adani," sources concluded.