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Maharashtra to draw power from Dabhol

BS Regional Bureau

In a late night decision the Democratic Front government in Mahrashtra approved a proposal for drawing 50 per cent of power from the 740 MW phase I of the Enron-promoted Dabhol Power Company at a rate of Rs 2.25 per unit.

According to the government decision, this would be an arrangement of a temporary nature with power being drawn by the Maharashtra State Electricity Board as and when it would require the same.

A proposal based on these lines would be prepared and forwarded to the Maharashtra Electricity Regulatory Commission, which is the power regulator for the state of Maharashtra and whose consent would be required before the project can be restarted.

"We will take as much power as we require with no compulsions on when we should do so. This ad hoc arrangement of drawing 50 per cent of power from phase I of DPC would have no legal implications as far as the ongoing litigation between the MSEB and the Enron promoted DPC," a government official said.

Indian financial institutions, led by IDBI, that have a major exposure to the project have been impressing upon the state and central governments to resolve the issue for some time. The lenders have sought to restart the project to prevent any deterioration of the plant's assets.

The MSEB discontinued drawing power from DPC midway last year following the steep increase in power tariffs owing to the spurt in international oil prices as well as foreign exchange fluctuations.

DPC for its part sought to revoke the state government guarantee to effect the realisation of its power dues owed by the MSEB.

The state electricity board retaliated by slapping a penalty of Rs 4 billion on DPC for not being able to provide full base load capacity within 180 minutes of start-up as provided for in the power purchase agreement. This is still being fought out in the courts.

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