Power purchase row: Keralam govt opted for GNA offer over Himachal Pradesh deal to avoid ₹2,200 crore extra liability, says CM

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V.D. Satheesan | Photo Credit: H. Vibhu

Keralam Chief Minister V.D. Satheesan on Wednesday said his government opted for power supply from GNA Energy OTC over an offer from the Himachal Pradesh government to avert an additional financial liability of over ₹2,200 crore on the State. The Chief Minister also refuted the Opposition charge that the transfer of M.G. Rajamanickam as chairman and managing director of the Kerala State Electricity Board (KSEB) was linked to the power purchases.

The officer was transferred as per procedures and officers senior to him, including Additional Chief Secretaries, had been transferred as part of the bureaucratic reshuffle earlier this week, Mr. Satheesan said at a post-Cabinet press briefing here. “It is the prerogative of the government. All procedures were followed,” he said.

The Chief Minister’s explanation came amid a raging controversy over the rationale of the power purchases. The Opposition CPI(M)-led LDF had alleged that the Congress-led UDF government had shunted out Mr. Rajamanickam for “not toeing the government line.”

Mr. Satheesan said power procurement from Himachal Pradesh would have caused additional liability of ₹2,232 crore.

Of the two proposals before the KSEB, the Himachal Pradesh offer, made via the PTC India Ltd, was priced at ₹14.50 per unit. The GNA Energy quoted two prices – ₹8.63 and ₹8.90 per unit. A comparison of the quantum of supply indicated that GNA offered to supply more during the peak hours, 6 p.m. to midnight. The Himachal Pradesh offer was for 843 million units (mu) up to March 2027, and GNA’s 1,812 mu. Of this, Himachal Pradesh offered a peak time supply of 353 mu, and GNA, 453 mu. In terms of the price ceiling set by the Electricity Regulatory Commission, procurement from GNA entailed an additional liability of ₹2.6 per unit and that from Himachal, ₹8.5, the Chief Minister pointed out.

“Just because one of them is a State government, should we buy from it at a higher price? If we had gone for it, it would have created an additional liability of ₹2,232 crore. So we decided to buy from GNA,” the Chief Minister said.

All offers were for round-the-clock (RTC) supply, he said, refuting the Opposition charge that the Himachal supply, through pricier, was solely to meet peak-time demand that therefore, a better deal for Keralam.

Mr. Satheesan also denied reports that the KSEB had repeatedly warned the government that a deal with GNA entailed an additional liability of ₹722 crore for Keralam.

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