New power minister lobbying to restart Enron India unit

Tuesday, 03 September 2002, 07:00 Hrs
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India's new Power Minister Anant Geete has begun lobbying with the Maharashtra government to restart buying power from bankrupt U.S. energy firm Enron Corp's Indian unit that has been inoperative for more than a year.

MUMBAI: Geete, like his predecessor Suresh Prabhu, is keen on Maharashtra sorting out a purchase price with financial institutions that have effectively taken control of the $2.9-billion Dabhol Power Company, say state government sources.

The sources say Geete has already sounded the state government on this issue and is keen that the Maharashtra government buys power at higher price than it is willing to pay.

While the Maharashtra State Electricity Board is keen on buying power at 2.25 per unit, the financial institutions led by lead-lender IDBI are pressing for 2.71 to 2.86 per unit.

Geete is said to be backing the financial institutions even though the higher price would push the cash strapped MSEB deeper into the read.

While MSEB has decided on the 2.25 per unit price, the matter has been put up before the state cabinet and the electricity regulatory commission for a final decision.

Officials fear MSEB's own power plants may have to be shut down during periods of slack demand if 75 percent of the power generated by DPC has to be purchased as required by the financial institutions.

A number of agencies like the Maharashtra government, the state utility and the Maharashtra Electricity Regulatory will play a major role in finalising tariffs with Enron's Dabhol Power Corporation.

During peak periods Maharashtra faces a shortfall of electricity from 800 MW to 1,200 MW.

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

Source: IANS

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