Prices still block Enron power for Maharashtra

Friday, 21 January 2005, 08:00 Hrs
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MUMBAI: Despite a severe power shortage, the Maharashtra government is holding out for lower tariffs from the mothballed Dabhol Power Company (DPC) plant.

According to officials, Maharashtra faces a peak power shortage of 3,200 MW during peak hours and the DPC could help tide over the shortage in a big way.

But the state government, which is working on a revival plan for the project in consultation with international lenders to the project, set up by US-based Enron Corp, is still pitching for lower tariffs.

According to sources, the state government continues to be keen on pricing electricity from the plant at around 3 per unit though lenders to the project are bargaining for higher prices.

Representatives of the state government met with foreign lenders in the US to revive the plant a few weeks ago, Maharashtra Chief Minister Vilasrao Deshmukh had told reporters here earlier this week.

The DPC project, originally worth $3 billion, suspended operations after the Maharashtra State Electricity Board stopped buying power saying it was too costly.

The cash-strapped Maharashtra government was keen on buying power from the plant at around 2.80 per unit, far lower than the 4 to 7 demanded by DPC's promoters.

The project's revival would depend on Indian lenders to the project buying out the debt of the foreign lenders which amounts to 31.5 billion ($720 million). A Special Purpose Vehicle has been floated for the purpose.

DPC was to have a capacity of 2,184 MW after both its phases are completed. Till it was shut, Phase I of the plant was operational while the second phase was nearing completion.

Source: IANS
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