The Centre has moved to resolve the Dabhol impasse with the Maharashtra government agreeing to sign the power purchase agreement (PPA) that incorporates an increase in per unit cost from the plant. At a meeting of the empowered group of ministers (EGoM), attended by external affairs minister Pranab Mukherjee and Maharashtra CM Vilasrao Deshmukh today, it was decided that cost restructuring for the plant would be referred to a committee under the chairmanship of the banking secretary. Under the agreement, the PPA would be signed with a fixed cost of 98.5 paise per unit, with the caveat that the recommendations of the committee would be incorporated later. The PPA would be signed within this week. While in terms of per unit costs, this works out to be 11 paise, in total this amounts to over Rs 2,500 crore. This is above the revival cost of Rs 10,000 crore that was earlier agreed on. Initially, the fixed cost worked out to be 96 paise but now the state government has agreed to an immediate increase of 2 paise with any further escalation also being added to the costs. Under the options put forward by the EGoM to cushion the rising costs, the associated LNG terminal could be hived off and the receipts raised through this process could be ploughed back into the power venture.
