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`Centre keen on starting Dabhol Phase I'

Our Bureau

Mr R.V. Shahi, Power Secretary, and Mr P. Subrahmanyam, Chairman, MERC, at a conference on `India Power 2002: Making the power sector viable' in Mumbai on Thursday.

MUMBAI, Sept. 19

THE Maharashtra State Electricity Board (MSEB), the State Government and IDBI should submit a joint tariff petition to the Maharashtra Electricity Regulatory Commission (MERC) for power purchase from the Dabhol power project, said Mr R.V. Shahi, Union Power Secretary.

"It is mandatory that every power purchase agreement be based on a consent from both buyer and seller. But MSEB has unilaterally rescinded the Dabhol PPA. And the new tariff petition before MERC has been submitted without consulting IDBI which now controls DPC,'' Mr Shahi told newspersons on the sidelines of a seminar organised by the Independent Power Producers Association of India, here today.

He said the Union Government was keen on restarting DPC's 658-MW Phase I plant. "If they (State and MSEB) need, the Ministry will prevail upon and persuade NTPC to run the plant on a management fee basis. NTPC could also complete the plant with investments from lenders,'' he said.

The State Government and MSEB were also in for flak over the demand for DPC power at Rs 2.25 per unit. "The cost of naphtha itself takes the tariff to more than Rs 2.25 per unit, there is obviously no correlation with the demanded tariff. There has to be seriousness about the proposal,'' Mr Shahi said.

He said there was a need for MSEB, State Government and IDBI to "come to a starting point'' in the discussions. "MSEB needs to see that the tariff they are asking for is feasible while IDBI needs to take their concerns about high tariff into account,'' he said. Also, help would have to be sought from GE and Bechtel for restarting the plant, as they possessed the software and manuals needed.

The Power Secretary criticised Maharashtra for the slow pace of reforms. He said MSEB might get a "lower rating'' from agencies such as ICRA and CRISIL which have been commissioned by the Centre to rate various state electricity boards on their reforms and efficiency parameters. Financial assistance to States will depend upon these ratings.

He said the State had lost two years only in preparing recommendation reports, which included those prepared by the Administrative Staff College (funded by Power Finance Corporation), the Godbole report and the white paper on reforms.

"Maharashtra is somewhat late in the reforms process. There have been recommendations but very little implementation,'' Mr Shahi said.

There was however, a "silver lining''for Maharashtra as things were looking up for the State after a two-year slack period.

NTPC may shelve LNG projects

MR Shahi said National Thermal Power Corporation "will not pursue'' LNG projects if the fuel was not priced at less than $3 per million btu.

The decision whether NTPC would pursue LNG-based power projects would depend on a reasonable price which should be less than $3 per mbtu and should not be linked to the dollar prices, he said.

NTPC has sought response from national and international oil and gas companies for sourcing LNG for its power projects.

"By December, NTPC should know LNG rates. And these will hopefully be better than those being offered currently,'' he said.

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