Stakeholders agree on Dabhol tariff at Rs 2.80/unit

Financial institutions, the Maharashtra government and the state electricity board have tentatively fixed Rs 2.80 per unit as interim tariff for the power generated by the Dabhol plant, as and when it starts operating. However, they told the Supreme Court today that it would require a few weeks to firm up the rate.

The Dabhol Power Company (DPC), however, was reluctant to accept the figure. Its counsel, P Chidambaram, told the Bench, consisting of Justice YK Sabharwal and Justice AR Lakshmanan, that the figure "concealed more than it revealed".

Chidambaram pointed out that fluctuations in the cost of naphtha, variations in the foreign exchange rate, the pending selection of an operator for the plant and several other variables would go into determining the final cost of producing an unit of power. However, he added that DPC had no objection to work restarting in the plant.

The court has been trying to restart the plant, which has been lying idle for over 24 months since Enron withdrew from the project over allegations of financial irregularities and the collapse of Enron itself.

However, DPC has not been very enthusiastic about restarting work at the plant. It wants arbitration proceedings in London, stayed by the Delhi High Court, to go on. It has also challenged the ruling of the Bombay High Court that the Maharashtra Electricity Regulatory Commission has exclusive jurisdiction over disputes between DPC and the state electricity board.

The Supreme Court, in an order passed today, granted two weeks to the parties to discuss the modalities of restarting the plant with the contractor, operator and others. It also allowed DPC to seek an early date for hearing its appeal against the high court judgment.

Two key players in the overall dispute again stayed away from the court proceedings. These are subsidiaries of GE and Bechtel, which had earlier been asked to be present in court. Chidambaram told the court that they would not submit to the jurisdiction of an Indian court. The GE subsidiary is Capital India Power Mauritius and the Bechtel subsidiary is Energy Enterprise.

Senior counsel for the financial institutions, Harish Salve, said efforts were on to find an operator to start the project. Since NTPC has found that the project is too technical for it to handle, an international operator has to be selected, probably through an global tender.