Maharashtra will get some respite from its power crises next week. Output from Ratnagiri Gas & Power Pvt Ltd at Dabhol would more than double, from 350 Mw currently to to 740 Mw. However, the increase in output will be far short of the overall 2,150-Mw capacity of the plant.

The plant comprises three blocks. Currently, only one unit of Block II (350 Mw) is running, using naphtha as fuel. The balance 390 Mw of the block couldn't be produced since January 2007, because a turbine of the block had some technical problems and had to be sent for repairs.

According to Chandan Roy, the chief executive officer of RGGPL, the entire Block II would become operational by Monday-Tuesday (May 8-9) and will generate 740 Mw of power, after re-installation of the repaired turbines.

"RGPPL would keep supplying power from Block II as long the Maharashtra State Electricity Distribution Company Ltd - also known as Mahavitaran - wants to buy it," said Roy. Naphtha is a costlier fuel for which RGPPL has to pay Rs 6.75 per unit, while Mahavitaran buys the power from RGPPL at Rs 5.50 per unit.

The use of naphtha is however an interim arrangement to tide over the non-availability of gas. When Block II and III starts running on gas, then Mahavitaran would pay around Rs 3.10 per unit, for which an agreement between Mahavitaran and RGPPL is ready, signed last month.

However, there is a delay in gas supply to the plant. Due to the Gujarat government's stay on GAIL India's Dahej-Uran gas pipeline, gas will not be available to RGPPL by June-end, as was expected earlier.

"There are issues with the 15-kilometre pipeline in Surat and if the pipeline is not laid then there wouldn't be any gas and hence no power," lamented Roy. If the Gujarat resolves the issue now, then block III (740 Mw) can also be operational by June 30, he added.

In the meantime, GAIL India Ltd, the company laying the Dahej-Uran pipeline for supplying gas to the power plant, while accepting that there are a few problems with the farmers in Surat, maintains that the entire pipeline to Dabhol will be completed by the first week of June. "We will complete the pipeline latest by the first week of June this year," said a senior GAIL official.

All aspects all of the pipeline work is completed, we now have to just lay it," said the official adding that farmers would need to be compensated for laying the pipeline in Surat and the company was considering it.

"A final decision will be taken by the empowered group of ministers," he said.

The board of GAIL has approved the infusion of Rs 500 crore (Rs 5 billion) to revive RGPPL. GAIL holds 28.33 per cent equity in RGPPL. GAIL and NTPC had initially contributed Rs 500 crore each to take equity stake of 28.33 per cent.

Last week the Power Finance Corporation also committed to give Rs 450 crore (Rs 4.5 billion) out of Rs 1,400 crore (Rs 14 billion) it has committed to revive the plant. PFC has already given Rs 350 crore (Rs 3.5 billion) to the project.

The government is also considering the option of hiving off the LNG terminal and selling it in order to expedite the revival of the Dabhol project. The revival cost has inflated by about Rs 2,600 crore (Rs 26 billion) -- from Rs 10,303 crore (Rs 103.03 billion) to Rs 12,895 crore (Rs 128.95 billion).