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May 21, 2001
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DPC faces fresh Rs 4 billion penalty

BS Bureau

The Maharashtra State Electricity Board has decided to go ahead with its decision to slap yet another Rs 4 billion penalty on the Dabhol Power Company, undeterred by the issuance of a preliminary termination notice by the latter. "PTN or no PTN, in the first week of June MSEB will slap one more Rs 4 billion penalty on the DPC for mis-declaration and default on the availability of power, a review for which will be taken next month," MSEB sources said in Bombay on Sunday.

The proposed penalty is in the wake of DPC's inability to provide power on February 12 and March 13, as per MSEB's demand in the stipulated time of three hours (according to the power purchase agreement (PPA) guidelines), they said.

"In fact, we will pay the Rs 1.39-billion April bill on May 23 and this will be the last payment from MSEB's side. The rest of the due amount should be adjusted in the penalty," sources added.

MSEB follows a four-month cycle, the first instance of failure on January 28 fell in the first cycle, while the other two instances fell in the next cycle of February-May, a bill for which would be prepared and despatched to the DPC in June, MSEB sources said.

Earlier, MSEB had slapped a Rs 4.01-billion penalty on DPC for "not generating" required power to meet the demand on January 28. DPC had on Saturday issued a PTN to MSEB, saying the loss-making board, the state government and the Centre had failed to meet their contractual obligations and therefore it had no choice "but to issue the notice."

Meanwhile, DPC is also attending the next meeting of the Godbole panel on Wednesday. Enron India managing director Wade Cline confirmed that the power company has not closed its doors to negotiate a satisfactory solution.

But state government officials said the onus of finding a workable solution is now with the Centre, which has to spell out its position on the offtake of power from phase-II of the project.

The Central government nominee on the Godbole committee, AV Gokak, is to attend deliberations for the first time this Wednesday. State officials attach great importance to his presence as he is likely to spell out Centre's view on the whole affair.

A state official said that DPC had indicated its willingness to renegotiate the tariff structure at its first presentation before the Godbole Committee. The sole thorn now is the offtake of power from phase-II of the project.

Maharashtra Chief Minister has said on Saturday that the state cannot afford to draw power from phase-II. So the issue is now to clear the decks for third parties to buy out power from the second part of the project.

"This is an issue that is in the Centre's realm, though there have been some statements that no central utility is in a position to buy power from Dabhol. DPC is willing to talk to lower its tariffs but we are not in a position to buy any of it even though we are contractually bound to buy it. So the solution lies in allowing others to buy it," the official said.

A senior MSEB official also denied the Board was planning to issue a counter termination notice to the DPC.

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