The Maharashtra government is considering a proposal by the Industrial Development Bank of India-led lenders to the Dabhol Power Company project to commit itself to purchasing not only the power (740 MW) generated from DPC's phase I but also a component of power from phase II (1444 MW) at Rs 2.80 per unit.
The state government has, however, sought details from IDBI about the calculation of the per unit cost of Rs 2.80 arrived at.
Similarly, the state government wants to know, what 'hit' the financial institutions and equity stake holders are committing to for the revival of the DPC project (2184 MW).
A well placed institutional source said: "One of the key issues to reviving the DPC plant pertains to ensuring that the power produced is utilised mostly in Maharashtra, while the balance is exported to other states through the transmission lines of the MSEB. The proposal submitted to the state government seeks a commitment from the MSEB that it would offtake the entire power from phase I as well as a minimum component from phase II."
A senior energy department official said: "While the IDBI package spelt out to the state government forms the basis for discussions and understanding the revival plans for the DPC project, we have not reached a negotiation stage yet."
He added that the state had sought details of the Rs 2.80 cost per unit of power that IDBI has proposed for the power generated by the DPC plant.
"How they arrived at this calculation is what we have sought to know. IDBI is still to get back to the state government with the sought data," the official said.
According to the institutional source, however, the Rs 2.80 cost is arrived at keeping a margin for servicing the existing debt and other liabilities.
This would mean that the cost of producing power from a revived DPC plant (fixed and variable components) would be marginally lower than the Rs 2.80 being sought.
The IDBI proposal, seeks a minimum commitment of power purchase by MSEB from the revived DPC plant on a take or pay basis, for the entire phase I generation as well as for a component of phase II.
The IDBI proposal also notes that since the Union government has waived various levies and duties recoverable from the DPC project to facilitate its revival, the state government also needs to similarly exempt the revived project of these costs.
"One of the levies relates to the stamp duty. Since the DPC project was not proposed to have been sold when it came into Maharashtra this was not an issue. Now that the revival plan of the DPC plant is being talked about and the project is to be sold to another party, an imposition of stamp duty for this asset sale of the company will result in a financial burden that would pass onto the consumers and reflect in the cost of power produced by the plant. Hence, even the state government is willing to consider this waiver positively to facilitate the package revival proposal of the DPC plant," the state energy official said.