NTPC might run Enron plant
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NTPC might run Enron plant

Friday, 20 September 2002, 07:00 Hrs
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The government-owned National Thermal Power Corporation might take over Enron Corporation's troubled Dabhol power plant if required, Union Power Secretary R.V. Shahi said here Thursday.


MUMBAI: Speaking to journalists at a seminar organised by the Independent Power Producers' Association of India, Shahi said the corporation might run the Dabhol Power Company's (DPC) plant purely on a commercial basis.

He added that the corporation might also undertake the completion of the plant provided, financial institutions like Industrial Development Bank of India (IDBI) bore the costs.

Shahi, however, added that the restarting of the plant would depend on the Maharashtra government, the Maharashtra State Electricity Board (MSEB) and the IDBI arriving at a consensus over the purchase price for power produced by the DPC.

The pricing and the quantum of power to be bought from the DPC would have to be cleared by the Maharashtra Electricity Regulatory Commission (MERC), he said.

The bureaucrat said General Electric (GE) and Bechtel had taken away critical software and manuals needed to run the power plant and these would have to be returned before the plant could be restarted. Shahi added that the central government would negotiate with the two companies to have these software and manuals returned.

The restarting of the project received a setback earlier this month when the MSEB formally rejected an offer by financial institutions like the IDBI to price electricity at 2.75 to 2.86 per unit. The board is bargaining for the power to be priced at Rs 2.25 to 2.50 per unit.

Among the conditions laid down by the state government for restarting the plant is a reduction in the rate of interest from 13.5 percent to 10 percent on loans given to the DPC by financial institutions.

The state government wants central government permission for DPC to sell power to other states.

Other demands include linking of the price of naphtha to that of coal instead of crude oil.

Maharashtra also wants the financial institutions' help to delink the DPC's liquefied natural gas (LNG) terminal from the power plant to enable the plant to earn revenue independently.

So far, the MSEB has refused to commit to buying power from the DPC. It fears this would force its own plants to be shut down during periods of slack demand.

The financial institutions are demanding guaranteed purchase of 75 percent of the power generated by the DPC. MSEB's own depreciated plants generate power at Rs 1.80 per unit.

Maharashtra faces a shortfall of 800 to 1,200 MW during peak demand periods. The state is expected to face power shortage from November onwards.

The Enron project went into limbo after the Maharashtra State Electricity Board, DPC's sole customer, declared its inability to pay for the power produced by the company saying it was too costly.

Source: IANS

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