Search the Internet          Tips  Sites: Finance, Investment

MSEB doubtful over DPC's 10% tariff cut proposal

The Maharashtra State Electricity Board has expressed serious doubts over Enron-promoted Dabhol Power Company's proposal to reduce its tariff by 10 per cent from the current average of Rs.5.52 to Rs 3.15 per unit.

"Agreed that they have mooted such a proposal verbally, we should not forget that it is ridden with assumptions, which are unacceptable to the board," MSEB sources said in Bombay on Wednesday.

"As it is, from May 1999 to April 2001, we have already paid a whopping Rs 337.05 billion at an average tariff of Rs 5.52 per unit for consumption of around 61,060 million units," they said.

DPC chief financial officer Mohan Gurunath met MSEB director (finance) B N Mishra in the morning to discuss the same, they said.

Enron India managing director K Wade Cline at the Godbole Committee meeting Tuesday had given a verbal assurance that the multinational was ready to reduce tariff by 10 per cent.

During the discussions, MSEB sources said, Wade Cline had informed the members that the tariff would be brought down if MSEB draws 2,184 MW of power at a 90 per cent plant load factor on an annual basis.

"This is not right. It is public knowledge that we do not require this much of power and the whole mess is about the same issue," sources said.

DPC has also said that the reduction would be effected only if the exchange rate of US Dollar against the Indian Rupee remains constant at Rs 47 and also that international crude prices too stand at $ 25 per barrel, they said.

"This has to be taken into account while the fact remains that the eastern region of India, on a 40 per cent PLF, has 60 per cent surplus and the cost of power is about Rs 1.80 to Rs 2 per unit," MSEB officials pointed out.

They said even NTPC supplies power through the northern grid to Rajasthan, Harayana, Delhi and southern and western region at Rs 1.70 per unit.

"Compared to these prices, we should know what we are up against," they said.

Industrial Development Bank of India acting chief S K Chakrabarti recently said the US energy major was ready to slash its tariff by 10 per cent after the second phase of the 2,184 MW project is functional in June first week.

"DPC has assured its Indian lenders that it was willing to reduce the tariff after firing of the 1,444 MW second phase. The per unit price would also reduce by another 10 per cent when the plant switches to Liqueified Natural Gas as fuel," he said.

Meanwhile, MSEB sources said DPC may not fire its 1,444 MW phase II on June six as the board has stopped drawing power from the Guhagar plant from noon Tuesday.

ALSO READ:
The Enron Saga