Financial crisis plagues MSEB

If concrete steps were not taken immediately to correct the situation, then the board will not be able to make the payment to Enron Power Corporation. 8220;Since last three months, we are paying a monthly bill of Rs 160 crore to Rs 180 crore in three to four installments. But we think, from next month, we will have to make other arrangements for the purpose,8221; the official said.

The board is banking on Maharashtra Electricity Regulatory Commission, which is examining the fresh proposal submitted by it for a hike in the tariff. 8220;We have submitted a proposal for an 18 per cent hike. If it is accepted, we will be able to garner at least Rs 2,000 crore per year. Though the proposed hike will not enable us to tackle the situation, it will certainly help to deal with the crisis,8221; the official said.

On the issue of arrears, the official said the board has to recover Rs 350 crore from the Mula Pravara Power Cooperative Society controlled by former minister Radhakrishna Vikhe Patil, Rs 1,100 crore from industrial houses, Rs 500 crore from rural water supply schemes. Rs 400 crore was locked in sick and closed industries and the remaining has to be recovered from domestic as well as agriculture consumers.

8220;While a massive drive will have to be launched to recover the huge arrears, at the same time, we feel that politicians should not intervene in the process of recovery of dues. Similarly, the State Government should provide adequate security cover for the board staff for checking power thefts, particularly in rural parts of the state,8221; the official said.

On power from Enron8217;s Dabhol Power Project, the MSEB official said at the moment, the board was receiving 790 MW every day. 8220;In September 8217;99, its rate was 3.23 per unit, it was 3.62 in December 8217;99 and in February 2000, it stood at 4.77 per unit against MSEB8217;s 1.37,8221; the official said.

The official said the tariff is likely to come down if Enron8217;s application for declaring it a mega project is accepted by the Centre. 8220;As per existing provisions, Enron has submitted its application to the State Government, which is yet to take a decision. If the proposal is accepted, the tariff will be reduced, but it will not be on par with MSEB, it will be still more,8221; he added.

Secondly, if the proposal is accepted, then the power purchase agreement will have to be redrafted. 8220;Under the concept of mega project in the energy sector, if the company has operation in more than one State, then only it is entitled for concessions under the central scheme. Thus for Enron, it will have to operate in one more State. Enron has contended that it should be permitted to supply power to neighbouring Karnataka so that it gets the benefit of the central schemes,8221; the official said.

Now, he added, Chief Minister Vilasrao Deshmukh will have to take a decision and then forward the application to the Centre for appropriate action.

In fact the issue of the power situation had been raised in the Assembly on Thursday by Sampant Pawar. Replying to the question, Energy Minister Padamsinh Patil had admitted that there was a shortfall of 1,200 MW and that the board was unable to provide power connection to 1,89,306 agriculturists, who have already deposited the required amount for power connection for the pump.

8220;We are unable to meet the demand due to power shortage. If we want more power, we will require additional funds. We are planning to seek financial aid from Power Finance Corporation as well as from leading financial institutions. But their main condition is that the minimum rate of return should be three per cent and to achieve the goal, we need to hike the existing tariff structure. Once the revised tariff structure is approved by MERC, I think it should not be difficult for us to raise funds for the purpose,8221; Patil had said.