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MSEB seeks to review PPA for Bhadrawati

BS Regional Bureau

The 1082 MW Bhadrawati power project got another setback early this week when the Maharashtra State Electricity Board said it might want to reconsider the power purchase agreement following the Godbole committee report.

The project is one of the original eight fast track power projects to be cleared by the Union government in the early nineties.

The high power energy review committee headed by former Union home secretary Madhav Godbole has asked MSEB to review all the PPAs signed by it with various independent power producers in accordance with the guidelines issued by the Maharashtra Electricity Regulatory Commission.

It has already recommended that the PPA between MSEB and Dabhol Power Corporation be re-negotiated and the high tariff cost brought down to save the MSEB from disaster.

The second part of the committee's report, which deals with the PPAs signed by the state electricity board with IPPs like Ispat and Reliance, is yet to be prepared.

MSEB's statement came before the Nagpur bench of the Bombay High Court which is hearing a petition filed by way of a public interest litigation by former Member of Parliament Banwarilal Purohit against the controversial PPA for the Bhadrawati (Chandrapur) power project.

The project, which is yet to see the light of the day, is being promoted by Ispat group's Central India Power Company Ltd. The case is being heard by a division bench consisting of Justice J N Patel and Justice P S Bramhe.

The PIL challenges the PPA signed by MSEB and Cipco on August 3, 1998, for the power project at the cost of Rs 45 billion and alleges that the agreement was in violation of the guidelines issued by the Central Electricity Authority.

The PIL objects to the high-tariff agreed by the MSEB and apprehends substantial loss to consumers and the state exchequer.

The high court recorded the statement of MSEB counsel Sunil Manohar that the state electricity board might re-consider its stance on the PPA with Cipco in the light of the Godbole Committee report and recommendations of the Maharashtra Electricity Regulatory Commission.

The MSEB made a categorical commitment that it would not go any further with the project till such time and also assured the high court that it would file a detailed affidavit within eight weeks.

Incidentally, the petitioner has also challenged the guarantee given by the state government and the counter-guarantee extended by the central government to the entire project and termed them as contrary to public interest and signed at the behest of respondent, Cipco and Ispat Group.

The PIL has urged the high court to quash and set aside the PPA between MSEB and Cipco as also the guarantee and counter guarantee given by the state and central government.

It also demands a probe by the Central Bureau of Investigation into the clearance given to independent thermal power projects by various authorities.

Senior counsel Abhishek Manu Singhvi appearing for the Ispat group and Cipco strongly challenged the bonafides of the petitioners and described the PIL as politically motivated.

He claimed that there was an unjustified delay of four years in filing the petition and urged the high court to direct the petitioner to deposit some amount before entertaining the PIL.

When the bench asked Cipco counsel about the high-tariff charged by the private power producers despite huge subsidy, counter-guarantees, mining rights and advanced technology, Singhvi assured the bench that he would satisfy the high court on these issues as well.

Differentiating the Cipco project at Bhadrawati from Dabhol Power Corporation, Singhvi pointed out that the former was a coal-based thermal power project while the later was a gas-based project and contended that the two could not be compared.

He urged the court to postpone the hearing till Godbole committee submits part-II of the report and said that the Bhadrawati project was still at a pre-embryonic stage.

The counsel for the petitioner M G Bhangde urged the high court to direct MSEB, the state government, the Central government and the Central Electricity Authority to produce all the original records pertaining to the project.

The high court directed the respondent authorities to make available all relevant original records at the time of the next hearing scheduled for July 30.

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