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June 8, 2001
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Money > Business Headlines > Report June 8, 2001 |
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States cannot afford DPC powerSantosh Tiwary & P Vaidyanathan Iyer The Centre's initiative towards facilitating sale of power from the Enron-promoted Dabhol project in Maharashtra to other states is likely to come a cropper. Sources told Business Standard that the states would in no way be able to purchase power from Dabhol Power Company as it would be difficult to lower the tariff to Rs 3 per unit. "No state will be able to buy power from DPC at a rate above Rs 3 per unit considering the rate at which they are supplying power to the consumers at present," said a source in the Central Electricity Authority. Power minister Suresh Prabhu had only last week asked CEA to consult the power-deficient neighbouring states of Maharashtra seeking their views on the requirement and tariff at which they would be able to buy electricity from DPC. Sources said that states such as Gujarat, Madhya Pradesh and Goa, to which DPC could supply power, were not in a position to buy it at a cost, which was more than what they spend at present. They pointed out that even after a considerable reduction in tariff, it was highly unlikely that DPC would sell power to these states at the rates affordable by them. And for the other states, transmission cost would only add up to the already high cost of Dabhol power. Hence, the proposition is almost ruled out, said sources. They said that the unit cost of power for all SEBs was around Rs 3 at present. Interestingly, the average tariff of all the SEBs was estimated to be Rs 2.08 per unit in 1999-2000, with a ratio of tariff to cost at 74 per cent. In 1999-2000, the unit cost of power supply in Gujarat was Rs 2.87, and in Madhya Pradesh, it was Rs 2.53. Maharashtra had Rs 2.54 per unit cost of power supply in 1999-2000. Sources said that the existing tariff structure and supply cost is a clear indication why third party sale had not been allowed by the states even though Section 43 of the Indian Electricity (Supply) Act, 1948 allowed such sale. They added that the chances of states allowing third-party sale by the independent power producers in the light of the DPC-MSEB controversy was remote. The Centre has asked the states to allow third-party sale from the IPPs. Powered by YOU MAY ALSO WANT TO READ:
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