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May 31, 2001
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Centre clears third party power sale by DPC

BS Economy Bureau

In a last ditch effort to break the DPC-MSEB logjam, the government has proposed that power deficient states can buy directly from DPC, in effect clearing third party sale by the company.

In a statement, Union Power Minister Suresh Prabhu said, "In response to discussions with the negotiating committee and the reported willingness of DPC to reduce the cost of power, directions have been issued to the Central Electricity Authority for discussions with power deficient states on the quantity of power they can absorb and the tariff at which it can be sold."

Earlier, the Centre's nominee in the negotiating committee, AV Gokak, met finance and power ministry officials to discuss the situation. This comes in the light of the MERC order restricting DPC from proceeding with the arbitration process till June 14.

The Centre's decision comes after the negotiation committee meeting on May 29 and the reported willingness of DPC to reduce the cost of power by 10 per cent, which it had agreed to in a meeting with lenders.

Even the Godbole panel had recommended third party sale of power by DPC. The sale of power outside MSEB would allow the company to spread its fixed charge over a larger base, thereby reducing the per unit tariff.

The panel had however added that DPC should first relieve MSEB of all its contractual obligations relating to the power plant.

The CEA, the statement said, has initiated discussions with the states in this regard. It added that contingent arrangements for evacuation of surplus power generated by DPC, if any, were also being finalised.

Prabhu reiterated that the government was committed to making all possible efforts to resolve the issues concerning the project in consultation with the stakeholders. He however added that a commercially viable MSEB would be an essential component of the settlement arrived at.

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