Dabhol power to cut Central Railway's bill by Rs 700 cr

As it shifts from MahaVitaran to Dabhol

The Central Railways, which has started purchase of 300 megawatt (Mw) from Ratnagiri Gas & Power Pvt Ltd (RGPPL) at Dabhol, will now be able to save Rs  700 crore annually. On the other hand, the state-run Maharashtra State Electricity Distribution Company (MahaVitaran) will have to suffer annual loss of Rs 400 crore from the exit of a high-paying consumer such as Central Railways.

A Central Railways official told Business Standard: “Earlier, the Central Railways was to draw power from MahaVitaran at Rs 9 a unit. However, after the power purchase agreement (PPA) with RGPPL, it will be available at Rs 6.33 a unit, a saving of Rs 2.67 per unit. Central Railways’ annual outgo towards power purchase was Rs 1,700 crore, which will now fall by Rs 700 crore thanks to the Dabhol power purchase at lowered tariff.”

The official said the reduction in tariff was also possible after the Maharashtra Cabinet decided to waive transmission charge. According to the official, Central Railways and RGPPL had inked PPA for the purchase of 500 Mw. Of this, RGPPL has launched supply of 300 Mw.

The official added Central Railways was also exploring other options to buy cheap power available in the market.

Meanwhile, MahaVitaran, which has already terminated its PPA with RGPPL early this year, expects  a loss of Rs 400 crore annually following deal between the Central Railways and RGPPL. “Actual loss will be calculated in due course of time. One thing is clear  MahaVitaran has lost a high paying consumer in Central Railways,” the MahaVitaran official said.