GE to share repair cost of Dabhol turbines

In what is termed a substantial positive development on the aim of fully reviving the Dabhol power project, General Electric (GE) has agreed to charge only half the cost of repairing its allegedly faulty turbines, instead of the full amount.

The agreement in this regard will be signed in 10 days between GE and Ratnagiri Gas and Power Project Ltd (RGPPL), the company formed in 2005 to take over and revive the closed 2,150 Mw project. A senior RGPPL official said the final proposal came from GE itself and has been cleared by the former’s board.

In addition, said the official, “They (GE) have also agreed to give us a guarantee of 87 per cent machine availability.”

However, industry experts remain sceptical if this new agreement will mark a breakthrough in getting the controversial project fully going. Dabhol’s power regeneration has been no more than 300-600 Mw of the 2,150 Mw installed, with various technical issues remaining, such as repeated tripping of turbines. “GE might share the repairing cost, but even the repaired machines have failed in the past,” said a senior analyst from a consultancy firm. And, the cost of repairing a failed turbine is significantly higher than the cost of new ones. GE blames the long hiatus in operations for the problem.

There is a compatibility problem between old and new turbines if the faulty ones are replaced, and experts are still working on the problem. BHEL has a joint venture with GE for servicing the machines installed at Dabhol, but every failed turbine has invariably had to be sent to GE’s Singapore workshop.

As the project already has a huge accumulation of past losses, just scrapping the faulty machines isn’t practical either; the original closure was because the power produced was too costly for MSEDCL, the state buyer.

As it is, RGPPL wants a 50 per cent hike in what it gets for power sale; a decision is pending from the Central Electricity Regulatory Commission. MSEDCL is the sole buyer and is paying Rs 3.65 a unit, of which Rs 1.01 is the fixed cost. RGPPL wants this fixed component to be hiked to Rs 2.65 a unit, said the company official.

Which means power companies in Maharashtra will have to pay yet more. Insurance companies are still keeping away from providing cover to the revived project. The insurance cover for block-I of the project, where a repaired turbine is ready for commissioning, has already expired. Two more blocks will lose cover from next month.

None of these issues is yet set for speedy redressal; another RGOPPL official confirms only three of six machines are working, which is why the hike in rates sought is needed. However, the GE agreement is a positive move, as they had been opposing the move till now.