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June 9, 2001
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Money > Business Headlines > Report June 9, 2001 |
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Godbole panel readies counter-proposalRenni Abraham The Madhav Godbole Committee is preparing a four or five-pronged counter-proposal to resolve the vexed high tariff issue. The counter-proposal is expected to be put forward at the committee's next meeting with senior DPC executives on June 13. According to a senior state government official, the counter-proposal seeks to reduce DPC's tariff, while maintaining the plant load factor at below 40 per cent. To bring the PLF down to this level, the power purchase agreement will have to be renegotiated. The new formula would mean that DPC would have to renegotiate its contract with gas suppliers to bring down the fuel cost. Among other things, DPC's contract now includes a "take or pay" clause under which the power utility has to pay for the gas regardless of whether it uses it or not. The committee also wants DPC to rework its loan agreements. The counter-proposal also suggests that DPC bring down rate of return. But, DPC pre-empted the idea by indicating to its lenders on Friday that it is willing to bring down RoR from 16 to 11 per cent, which will bring the tariff down. "DPC has already indicated that it is willing to reduce RoR. Since we will be reworking the PPA, DPC should be willing to rework its loans as well as renegotiate the gas contract with its suppliers," the official said. At the committee's last meeting, DPC had mooted a split-tariff plan for the offtake of power from phase one of DPC project, with the Maharashtra State Electricity Board paying one tariff (Rs 3.50 per unit) and a conglomeration of central government utilities (National Thermal Power Corporation, Railways, Power Trading Corporation) paying Rs 3.30 for the remaining two blocks in phase II. The central government would provide credit support to some states for buying the remaining portion of the power. However, the proposal has all but been rejected by the committee as it envisaged a 90 per cent offtake of power from phase one by the MSEB. The Maharashtra Electricity Regulatory Commission's last year verdict makes it mandatory upon the MSEB to purchase power only from the cheapest available source while restricting its annual power offtake from the DPC to 3,044 million units. The Godbole committee has been set up to renegotiate tariffs and the PPA power purchase agreement with DPC. Powered by YOU MAY ALSO WANT TO READ:
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