Dabhol power project slips on restart attempt

Deadline breached as power purchase demand not received from the rail ministry

The 1,967-Mw Dabhol power project, which has missed the November 1 restart deadline, is likely to resume production from November 9. Reason: Ratnagiri Gas & Power Pvt Ltd (RGPPL), the owner of the project, has failed to get power purchase demand from the railway ministry, which had decided to purchase 500 Mw from Dabhol.

The RGPPL board, which had met on September 30, had said the operation would be restored on November 1. The board had also approved the de-merger of the company into two — one for power generation and the other for for running LNG terminal.

An RGPPL officer, who did not want to be named, told Business Standard: “The power generation has not begun from November 1. Even though the Indian Railways have entered into power purchase agreement with RGPPL, the former has not yet conveyed schedule and the actual demand for power purchase. This is necessary for a company to accordingly restart generation and supply power.” He said that a team of Indian Railways is expected to visit the plant on Wednesday and discuss power purchase schedule.

The official said RGPPL now hopes to restart the generation from November 9 if it gets power purchase schedule from the Indian Railways.  “The company has already  secured 1.98 million metric standard cubic metres per day (MMSCMD) of gas under the power system development fund (PSDF) set up by the government to help power companies buy expensive imported fuel,” he noted.

According to the board decision, the cost of power will be Rs 4.79 per unit,” he said.

However, the official said purchase of 500 MW of power by the Indian Railways is not at all sufficient for RGPPL to break even. "Additional gas and demand commitments from more power purchasing utilities are required to achieve full generation capacity of 1,967 MW and improve cash flows," the officer added.

The Maharashtra government officer said the state cabinet has already taken a decision to waive transmission charges. However, he reiterated that the state was not at all keen to resume purchase of power from Dabhol project in view of adequate power availability. He also reiterated that the state run MahaVitaran had already terminated its power purchase agreement with RGPPL.