Railways in talks to draw 200 Mw of Dabhol power

The Indian Railways has initiated talks with the Ratnagiri Gas and Power Private Limited (RGPPL) to draw 200 megawatt (Mw) of power from the Dabhol project. The railways currently procures 500 Mw of Dabhol power after the project was revived in November 2015 following a nearly two-year closure.

RGPPL, which has secured imported gas, is selling Dabhol power at Rs 4.75 per unit to the Indian Railways.

“Gas is no more a problem as two tankers are filled with it. Imported gas has been procured at $4-5 per million British thermal unit,” an RGPPL official told Business Standard, adding, “The Central Railways has evinced desire to purchase another 200 Mw and talks are underway. An agreement will be reached very soon.”

The official said 500 Mw of generation is not adequate to service debt, even as lenders have been pressing for an increase in generation to its full capacity of 1,967 Mw.

The RGPPL official said the company is finding it difficult to get new buyers for Dabhol power especially in the wake of adequate availability of power in the market at competitive rate ranging between Rs 2.75 and 3.50 per unit.

“There are no buyers. Maharashtra has stopped purchase of Dabhol project since December 2014-January 2015 and it has no plans to restart drawing power,” the official said.

Power minister Piyush Goyal has also admitted that the Dabhol power project’s capacity is not being fully utilised.