The Hindu Business Line : `One Dabhol power block to become operational in mid-2006'

ONLY days after Ratnagiri Gas and Power Pvt Ltd (RGPPL) took over physical possession of the Dabhol power project (erstwhile Enron-promoted), a high level team made a site visit on Sunday and pronounced that at least one `block' would be operational by May or June of next year.

In all, three blocks of the plant are scheduled to be operational by November 2006. That would be more than five years since the shut down of the 2,184-megawatt plant in May 2001 when phase I was operational and phase II being commissioned. The LNG facility, which was crucial to the plant, was then 85 per cent complete.

After its restructuring and takeover by RGPPL, the project cost of the Dabhol plant, inclusive of estimates for its completion, now stands at Rs 10,305 crore; around two-thirds of its original cost, pointed out Mr R.V. Shahi, Union Secretary for Power, at a news conference here on Sunday. The total levelised cost of energy has been worked out to Rs 2.30 per kilowatt hour, which would go up by 3 paise to allow for return on the Maharashtra State Electricity Board (MSEB) Holding Company's equity in RGPPL.

The increase in prices in a tight global LNG market could drive up the financial cost, though the company would be making its best endeavour in financial engineering to cap the cost at Rs 2.50 per unit, said Mr Shahi.

RGPPL's stakeholders are National Thermal Power Corporation, GAIL (India) Ltd, which have committed equity of Rs 500 crore each, MSEB Holding Company and Indian financial institutions. The company borrowed Rs 7,012 crore from institutional shareholders. The debt-equity ratio of the company is 5:1, said Ms Kalpana Morparia, Deputy Managing Director of ICICI Bank, while speaking to newspersons after the conference.

Mr Jayant Kawle, Managing Director, MSEB, said his mandate was to buy power at Rs 2.33. Much of the plant's success in future will depend on the cost and availability of LNG.

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