The Andhra Pradesh government is examining whether the state can cancel a contract with the Solar Energy Corp of India (SECI) following allegations by prosecutors in New York that the Adani Group paid around $265 million in bribes to officials in several Indian states to secure renewable energy contracts.
Both the Telugu Desam Party and the state government have discussed this, TDP spokesperson and chairman of the state biodiversity board N Vijaya Kumar said on Tuesday.
News agency Reuters reported, citing unnamed sources, that Andhra Pradesh was likely to suspend the deal.
The prosecutors claimed that the bulk of the bribes ($228 million) was paid to Andhra Pradesh officials when it was governed by the Jagan Mohan Reddy-led YSCRP, which was voted out in this summer’s elections. The YSRCP has said there was nothing wrong with the deal it struck with SECI.
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The allegation is that SECI entered into an agreement with the Adani Group to buy solar power at a certain price that it would then sell to the states, but that because it had agreed to buy the power at a high rate, no state was willing to sign a Power Sales Agreement (PSA) with it. Adani, the prosecutors allege, incentivised the states to sign the agreement.
While the states named by the US prosectors were at the time all governed by parties opposed to the BJP, which runs the Union government — except for the Union territory of Jammu & Kashmir which was under the Centre due to Presiden’t Rule — opposition parties have targeted the Union government and Prime Minister Narendra Modi over it. Adani Group chief Gautam Adani is considered to be close to the Prime Minister.
The TDP, which is keen to target its rival YSRCP for the deal, is a key ally of the BJP in the Union government.
Kumar said that there may be legal complications should the state try to cancel the deal, and that the ramifications were being examined.
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“It is a 25-year power purchase agreement, which needs to be studied thoroughly to see whether its termination would lead to any further legal complications, as it involves not just the state government and SECI, but also the electricity regulatory commission which gave the approval for the PPA. The agreement is now under legal scrutiny and only after that the government will take a decision,” he said.
But he admitted that the deal does result in a burden on the exchequer over 25 years and that the ultimate losers of the deal are “consumers who will have to bear the cost”.
The Adani Group has denied any wrongdoing and claimed that the charges levied by the US prosecutors are baseless.
