Amaravati, Jul 24 (IANS): Amid criticism from different quarters of his decision to review Power Purchase Agreements (PPAs), Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy on Wednesday defended the move saying it is in the interests of industry.

Defended the move during a debate on the Bill aimed at providing 75 per cent jobs to locals in all industries in the state, the Chief Minister told the state Assembly that re-negotiation of PPAs signed during the previous Telugu Desam Party (TDP) government was a pro-industry move.

Reddy said that just like on the Bill in consideration, a false propaganda was also being carried out by vested interests regarding the decision to review existing PPAs.

"Some people are spreading canards that no industry will come to Andhra Pradesh and that the industry is unhappy. There is no truth in it and our policy is to bring in power in a cost-effective manner," he said.

Reddy also said the government wanted to procure power at a competitive rate because industries would shy away from purchasing power at a higher cost.

He said the government is trying to renegotiate the PPAs so that the price differential can be passed on to the poor through various welfare measures.

The YSR Congress Party (YSRCP) government has already announced the review of all PPAs on the ground that the previous government agreed to pay higher tariff through the agreements signed with renewable power producers.

Finance Minister B. Rajendranath Reddy said despite adequate availability of energy from conventional sources, purchase of renewable energy at prohibitively high tariffs by previous government resulted in a loss of Rs 5,497 crore during the last four years.

The government's move to review PPAs has come under flak from various rating agencies.

The Centre has also found fault with the decision. Union Power Minister R.K. Singh wrote to the Chief Minister few days ago to honour the contracts. He cautioned that this could cause investments to dry up and bring growth to a halt.

Rating firm Crisil said on Tuesday that the review of renewable project PPAs had put at risk debts worth Rs 21,000 crore.

Fitch Ratings has said that the Andhra Pradesh government's attempts to renegotiate agreements for solar and wind power will hamper the generators' operating cash flows.

It said the state government may face vigorous challenges from the operators of renewable power projects and the Centre.