Centre may rope in NTPC to restart Dahbol phase-1 project

Nisha Das
12 May 2003

The government's move is based on the recent decision of the state government to allow the Maharashtra State Electricity Board (MSEB) to draw power from DPC phase-1 at an optimum level of 83 per cent and tariff around Rs 2.80 per kwh on an interim basis.

Though the state government decision is subject to the approval by the Maharashtra State Electricity Regulatory Commission and the Bombay High Court, the central government has already initiated the groundwork to commence the power production in Dabhol, which is lying ideal for the past two years.

Sources close to the development say that the ministry of power is of the opinion that, at present, NTPC, which is operating various thermal plants in India and overseas, will be the ideal operator as the corporation has all internationally sophisticated technical know-how. Earlier, the government had considered NPTC as the maintenance contractor for the plant.

The sources add that the Rs 2.80-per-kwh tariff level takes into account the current cost of naphtha (after remission of all central- and state-level taxes) with the fuel cost being a pass-through item. For the proposed interim start of Dabhol phase-I, the tariff model is based on the recovery on the interest of debt at a reduced rate, without any provision of depreciation or debt repayment.

Financial institutional sources, however, maintain that the Dabhol power plant can be restarted only after at least six-to-nine months and hinges on the resolution of a number of micro-issues.

Representatives of the union and state governments, the MSEB, NTPC, the domestic lenders' consortium and the two US-based companies, General Electric (GE) and Bechtel, are meeting on a monthly basis to try and restart the plant.