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Fresh proposal to revive Dabhol power unit

Renni Abraham in Mumbai

The Maharashtra State Electricity Board is studying the possible cost per unit of power from a revived Dabhol Power Company project in the event of naphtha being made a pass-through, other fixed and variable costs as well as an increased plant-load factor.

The moves comes in the wake of the pressure from the Industrial Development Bank of India-led consortium of domestic lenders which have a huge exposure to the Enron-promoted power project. Banks and other financial institutions are exerting pressure on MSEB to agree to a higher cost per unit of power for reviving the project.

"We are in talks with the IDBI-led consortium. However, it is premature to say that a decision has been reached on the cost per unit at which MSEB will buy power from the project," MSEB chairman A K Mago said.

Informal talks were being held for quite some time, where the IDBI had impressed upon the need to factor in the fixed and variable components of costs while affixing a rate per unit of power that MSEB was willing to offtake from the project, he added.

"The financial institutions feel naphtha will have to be a pass-through. We are calculating what increase in the cost of per unit of power this would entail for MSEB. However, our stance is clear. Even when we are able to prepare a proposal factoring in these components of cost, the same would have to be submitted to the Maharashtra government," he said.

Mago noted that it was not possible to set a rate per unit at the moment. "Even if we consider the naphtha pass-through, given today's international oil prices the cost per unit of power will be in the range of Rs 3 per unit."

Once a fresh proposal was worked out it would have to be approved by the state Cabinet and the Maharashtra Electricity Regulatory Commission. Discussions with the lenders consortium was an ongoing process, he noted.

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