NTPC to run Dabhol power plant

By SiliconIndia   |   Thursday, 26 September 2002, 07:00 Hrs
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India's state-owned National Thermal Power Corporation (NTPC) has agreed to restart and operate the troubled 2,184 MW Dabhol power project in Maharashtra, for a management fee. The plant has been closed for the last 18 months.

NEW DELHI: Promoted by the bankrupt U.S.-based Enron Corporation, the Dabhol project got stalled before the completion of its second and final phases, with its sole power purchaser and equity partner Maharashtra State Electricity Board (MSEB) refusing to abide by its commitment to buy power on the grounds that the rates were too high.

Over 90 billion has so far been invested in the project, which saw the single biggest foreign investment inflow to India in the power sector. The financial institutions' total exposure in both phases of the project is to the tune of Rs 62.04 billion.

Only the first 740 MW phase of the project has been commissioned so far.

"The NTPC has agreed to undertake the task of restarting and operation of the Dabhol power plant, with the technical support of the main suppliers GE and Bechtel, for a management fee," Power Secretary R.V. Shahi said on the sidelines of a power seminar organized here by leading industry bodies.

On Wednesday, all the stakeholders in the Dabhol power project held detailed discussions with power ministry officials to resolve the hurdles to restarting the plant that could help bridge the growing gap between power shortfall and supply in the country.

India is targeting to double its power generation capacity in the next 10 years with an addition of 100,000 MW, of which over 41,000 MW projects is to be added by 2007, with NTPC's projects underway contributing 4,300 MW.

The state-owned thermal power major will take a final decision after an inspection of the safety aspects and the software used at the Dabhol plant, Shahi said.

When asked, NTPC chairman and managing director C.P. Jain refused to confirm the developments on the Dabhol front other than to say that a decision would be taken after the official team constituted by the power ministry completed its inspection of the closed plant.

The inspection team, comprising representatives of NTPC, GE, Bechtel, the MSEB, an equity stakeholder and sole buyer of power from the plant, the Central Electricity Authority and the consortium of lenders led by IDBI, would be visiting the plant within a week for detailed preliminary inspection, said Shahi.

"The team would submit the preliminary assessment report in two to three weeks," he said.
The final decision on the restarting of the power plant would still depend on an amicable settlement of the tariff issue by the MSEB, the Maharashtra government and the lenders.

"The state electricity regulatory commission would have to approve the final tariff. The lenders are keen that NTPC take up the operation of the plant on their behalf," said Shahi.

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