RGPPL plans Dabhol power plant revival, inks purchase agreement with Railwayshttps://indianexpress.com/article/cities/mumbai/rgppl-plans-dabhol-power-plant-revival-inks-purchase-agreement-with-railways/

RGPPL plans Dabhol power plant revival, inks purchase agreement with Railways

The plant was shut since December 2013 for want of gas and financial constraints.

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RGPPL has proposed a sale price of Rs 6.15 per unit. Of this, it will charge Indian Railways Rs 4.70 per unit. ( Express Photo)

The Ratnagiri Gas Power Project Ltd (RGPPL) has drafted a comprehensive plan for the revival of the debt-ridden Dabhol power plant, which has been lying defunct for years, and is in the process of finalising a power purchase agreement with the Indian Railways.

As per the plan, the Indian Railways has agreed to purchase 500 megawatt power produced by the Dabhol plant, located at Anjanwel, in Maharashtra’s Ratnagiri district. Two hundred of the 500 megawatt power will be used in Maharashtra, 100 megawatt in West Bengal, 150 megwatt in Madhya Pradesh and another 50 megawatt in Chhattisgarh, a Maharashtra government official said.

The Ministry of Power has already issued a letter earlier this month for temporary allocation of 500 megwatt from the 1,967-megwatt Dabhol power plant to the Indian Railways, and a formal power purchase agreement is currently being finalised.

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The plant recently secured 1.98 million standard cubic feet per day of gas, and has proposed a sale price of Rs 6.15 per unit. Of this, it will charge Rs 4.70 per unit to the Railways and the rest Rs 1.45 per unit is proposed to be bridged through support from the Union government’s Power System Development Fund.

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A senior Maharashtra government official told The Indian Express, “The idea is to revive the dead power project. The Railways have a requirement for power in the four states. So to bring in viability in the plant’s revival, the railways will purchase power. The government machinery will support the project through waivers of certain duties and concessions.”

The Dabhol project has been in troubled waters ever since work started in 1992 with first the initial developer Enron’s bankruptcy, change in the source of fuel, issues over the power purchase price and so on.

The plant was shut since December 2013 for want of gas and financial constraints.

As support, the Maharashtra government is expected to waive the Value Added Tax and octroi.

The Central Electricity Regulatory Commission and the power regulators of Maharashtra, Chhattisgarh, Madhya Pradesh and West Bengal will waive transmission utility charges and losses.

Besides, the states are also expected to give their assent for distribution open access, which allows a consumer to migrate to a service provider of his choice upon payment of a cross-subsidy charge to his existing provider.

“Talks are also underway with existing beneficiaries, that is Maharashtra, Goa, Daman Diu and Dadra-Nagar Haveli to persuade them to purchase power on domestic gas,” the official said.

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) had terminated its power purchase agreement for the Dabhol plant, saying it could not afford to buy power at Rs 5.50 per unit as proposed by RGPPL.

The National Thermal Power Corporation (NTPC) and Gas Authority of India Ltd (GAIL) are the main stakeholders of the Dabhol power project.

The Maharashtra government and financial institutions such as IDBI Bank, State Bank of India, ICICI Bank and Canara Bank also have equity stakes.