FIs consider exiting Dabhol plant
Mumbai: The Dabhol power plant may be in trouble again as financial institutions may back out of the project.

Sources said Rs1,600 crore is required to refurbish blocks one and three of the Dabhol power plant. According to the lending terms, the lenders to the projects would have to bear the additional costs. Now the FIs are not very keen on financing the project as they fear it will become commercially unviable at the current projected cost.

Ratnagiri Gas &Power Distribution Co's acquisition of the Dabhol plant was financed by FIs, which included SBI, ICICI and IDBI. IDBI which picked up 85 per cent of the project cost as debt. GAIL and NTPC invested 15 per cent by way of equity in the special purpose vehicle floated for the project.

The GAIL team found that Block 1 needed extensive repairs, in addition to regular overhaul, as Enron had run the plant for over 15,000 hours. It also found the heat recovery steam generators to be in bad shape.

Another reason the project has failed to take off is because the Maharashtra State Electricity Distribution Company (Mahadiscom) has refused to buy power from the plant as rates have shot up to Rs 6 per unit. Mahadiscom says it is able to source power from the eastern grid at far cheaper rates.

Sources said the fate of the project depends on Mahadiscom buying power from the plant. The plant has been shut since early July as the state's peak load comes down during the monsoon months.
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Govt may set up new pay committee for public sector staff
New Delhi: Employees of public sector undertakings (PSUs) have something to feel happy about. The central government is planning to set up a separate pay committee for employees of PSUs. The move is likely to benefit more than 17 lakh employees working in PSUs across the country. The PSU pay committee will review the salary structure and components of PSU employees and submit its recommendations to the government before New Year.

This committee will take into account various issues like basic pay, house rent allowance, transportation benefit, leave travel concession etc. One vital issue that is expected to be taken up by the committee is the merging of the dearness allowance (DA) with the basic salary.

Public sector undertakings want that salaries should be performance oriented and the sector should be rewarded better as it is engaged in business activities unlike the government, he added. The plus point of merging DA with the basic salary is that benefits like HRA, which are calculated on the basic pay will go up.
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