Andhra Pradesh Chief Minister YS Jagan Mohan Reddy ordered legal action against his predecessor Chandrababu Naidu for entering into agreements that allegedly cost state exchequer loss of Rs 2,636 crore.
The announcement was made at a high-level review meeting on the power sector, held by the CM, where he said that there was "massive corruption" in power purchase deals signed by the previous government.
"Who purchased power at high prices and who decided to do so? Will people's money be looted in such a brazen manner? Conduct an inquiry and take legal action against all those involved, including the then chief minister and the then energy minister," Jagan reportedly said at the meeting.
"We have identified as many as 30 agreements signed with various companies by the previous government involving massive corruption," Jagan added.
According to an official release, the CM ordered constitution of a cabinet sub-committee, to investigate various scandals indulged in by the previous Telugu Desam Party (TDP). The committee will be assisted by the Anti-Corruption Bureau, Crime Investigation Department and Vigilance and Enforcement.
The CM also claimed that the previous government had altered rules and bought power on a must-run condition at higher prices from solar and wind power producers.
He questioned the need for buying power at a higher cost (Wind power at Rs 4.83 to 4.84 a unit and solar power at Rs 4.5 to Rs 6.8 a unit between 2015 to 2018) when the government power generating stations offered electricity at Rs 3.25 per unit.
"The power sector in the state is in a totally sinking stage because of the massive corruption in power purchase agreements and steep escalation of costs in setting up new generating stations," said Jagan.
He also announced the constitution of another committee to renegotiate the agreements with solar and wind power companies. If necessary the agreements will be cancelled, he said.
The CM also instructed the officials to take steps to recover the excess payments made towards earlier power purchases.
This decision comes two days after Jagan ordered the demolition of Praja Vedika, a conference hall adjacent to Naidu's house in Amravati. The conference hall was bulldozed on Wednesday.
The CM had spoken about the cancellation of agreements with solar and wind power producers, as soon as the YSR Congress Party formed the government last month.