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Power deficient Maharashtra cool to Enron offer

Shiv Kumar in Bombay

Despite being plagued by power shortages, the Maharashtra government has chosen to ignore a proposal by Enron's Dabhol Power Corporation to supply power at lower rates.

State government officials dismissed as stale news DPC managing director K Wade Cline's statement that the company could sell power at prices as low as Rs 3.80 per unit.

According to official sources, the state government is waiting for a judicial verdict before taking a decision on purchasing power from Enron's DPC.

The Maharashtra government announced severe power outages across the state last weekend. Shortly after the declaration, Cline said in a media statement that the DPC could easily meet the power shortage faced by the state.

While the state faces power shortages between 800 MW and 1,500 MW every day, Enron will be able to provide 728 MW immediately, Cline said.

With the Dabhol plant operating at 90 per cent capacity, it could offer power at Rs 4.40 per unit. He urged the state and Central governments to exempt naphtha from excise duties to help price power at Rs 3.80 per unit.

Even as the two bodies are fighting it out in the courts, the Maharashtra government has demanded that power be priced at Rs 2.80 per unit.

A committee headed by retired bureaucrat Madhav Godbole, who enquired into the deal, recommended restructuring DPC's operations in Maharashtra.

The committee also called upon the company to renegotiate its deals with international suppliers of naphtha and the power purchase agreement with MSEB.

The state government is locked in a dispute with the U.S. power major as it is unable to pay its bills. The DPC plant set up by Enron to generate 1,444 MW of power is now lying idle.

According to MSEB, it cannot afford to purchase power from the DPC since it is not able to realise the high tariffs from its users.

While Enron's power can be as high as Rs 7 per unit, MSEB is able to realise only a fraction of this from its users. For instance, agriculturists in Maharashtra pay only 42 paise for power, while households have to pay slightly more.

Industrial consumers are expected to pay the highest to subsidise residential and agricultural users.

Vinay Bansal, MSEB chairman, said Maharashtra is able to draw only 1500 MW of power as against 2356 MW allotted to it.

Indo-Asian News Service

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