Scrapping, revising PPAs will be an uphill task

Patiala The Punjab government’s direction to the Punjab State Power Corporation Limited (PSPCL) to revise/cancel Power Purchase Agreements (PPAs) with independent power producers is likely to be an uphill task on the two major counts of legality and financial implications.

In terms of money, the agreements provide for the PSPCL to bear fixed costs of power generation for three years, before it can terminate the contract. This amount, say experts, will be astronomical and run into thousands of crore rupees. Legally, the agreements are so loaded in the favour of the private companies that a challenge to Punjab’s action will definitely be upheld, experts claim.