The Hindu Business Line : GoM to meet on Oct 1 to resolve Dabhol issue

THE Empowered Group of Ministers, set up to look into restarting the beleaguered 2,184-MW Dabhol Power Company, would meet on October 1 for resolving all outstanding issues.

Speaking to presspersons here on Wednesday, the Union Minister for Power, Mr P.M. Sayeed, said, "All issues on the project would be taken up at the meeting."

He said that the issues to be discussed include the domestic financial institutions' proposal for buying out the foreign debt of equivalent to $310 million.

Mr Sayeed also said that the Government was open to the idea of initial public offerings by National Hydroelectric Power Company Ltd, Power Finance Corporation and Rural Electrification Corporation Ltd similar to the route adopted by the National Thermal Power Corporation.

He, however, added that none of these PSUs had so far made any IPO proposal to the Ministry so far.

"When such proposals come up we are prepared to consider it," he added.

Referring to capacity additions, he said, the plan target of 41,000 MW would be achieved. The only problem was with some of the independent power producers (IPPs), who were expected to contribute at least 7,000 MW of capacity during the current plan.

Of this, about 4,000 MW had already achieved financial closure. About 3,000 MW of projects were being pushed to financial closure by next month.

He said the Ministry of Power had raised the target for the 11th Plan to 61,000 MW. Preparatory for achieving this target had already begun.

The progress of reforms had so far been satisfactory. States, which had managed to reduce their cash losses include, Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.

In these States, the gap between the cost of supply and revenue realised had been reduced to 63 paise per unit, he added.

The draft National Electricity Policy had already been prepared in consultation with the State Governments keeping in view the targets laid out in the Common Minimum Programme.

This policy would be shortly notified. Referring to distribution sector reforms, he said, three States had completed 100 per cent consumer metering and another seven States had achieved 90 per cent metering.

Under the Accelerated Power Development and Reforms Programme (APDRP), he said States had been sanctioned up to Rs 17,624 crore of the Rs 40,000 crore corpus created for the purpose.

Of this, Rs 4,414.60 crore had already been utilised by the States and the electricity boards for the purpose. To address some of the specific difficulties for complying with the reform milestones,

Mr Sayeed said, 13 States were given extensions by up to one year for reorganising their electricity boards.

Five States were given incentives equivalent to Rs 780 crore. The incentive component funds were provided by the Power Ministry to utilities for actual cash loss reduction by way of grants.

The losses were calculated net of subsidy and receivables.