India’s Dabhol Project could re-start by April

13 November 2002 – India’s mothballed Dabhol power project in the Western state of Maharashtra could start generating electricity within four months, provided essential spare parts are made available, the Press Trust of India news agency reported Wednesday, quoting a top-ranking Indian government official.

“Central Electricity Authority, Maharashtra State Electricity Board and National Thermal Power Corp. agreed (Tuesday) that power generation could be possible within four to six months,” the PTI quoted federal Power Secretary R.V. Shahi as saying.

Dabhol is the largest foreign investment project in India to date at $2.9bn. Enron holds a controlling 65 per cent stake in Dabhol Power Co., while General Electric Co. and Bechtel Corp. own 10 per cent each. State utility company Maharashtra State Electricity Board holds the remaining 15 per cent.

Financial institutions led by the Infrastructure Development Bank of India have endorsed the Maharashtra Government’s proposal to buy power at Rs 2.80 ($0.06) a unit, and have asked the National Thermal Power Corporation (NTPC) to begin the inspection of the plant. “IDBI has agreed for the tariff of Rs 2.80 per unit,” Federal Power Minister Anant Geete told reporters after holding a meeting of stake holders

The 2184 MW Dabhol project has been idle since June 2001 after its sole customer, the Maharashtra State Electricity Board, stopped payments following a dispute over DPC’s tariffs for the power. The tariff dispute has since been resolved and a restart of the Dabhol plant now looks imminent.

However, the plant has been decaying ever since it became inoperative and it will be almost impossible to restart it immediately, without carrying out essential repairs of vital components.

As part of the package, an expert team drawn from NTPC, GE, Bechtel and IDBI would jointly evaluate the technical aspects of the plant and machinery as well as the spares and give its report within a week to enable a final decision on restarting the project. If the project is put on stream again, NTPC would operate on a contractual basis, Geete said. “We are happy to hear from the representatives of all stakeholders like GE, Bechtel and others that state of the plant was good and it, under no circumstances, should take 15 months to restart the generation,” Geete said after an hour long meeting.

IDBI and Maharashtra State Electricity Board will now approach the power regulator in the state with the new tariff proposal for approval, Geete said.

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