The 2,150-Mw Dabhol power project in Maharashtra faced another turbine failure last week due to the allegedly defective machines supplied by General Electric (GE), adding to the losses of the plant’s owner — Ratnagiri Gas and Power Projects Pvt Ltd (RGPPL).
“The plant is in a critical position now. The company cannot survive like this,” said a senior RGPPL official, confirming that another turbine had failed about 10 days ago.
“Each such failure adds up to a loss of Rs 50-200 crore,” the official added.
The plant has three blocks with six gas turbines. However, only two turbines are functioning at present, due to which power generation from the plant has come down to 300-600 Mw against the capacity of over 2,000 Mw, according to the official.
The project, originally called Dabhol Power Co, was renamed RGPPL after it was taken over by a combine of public sector banks, the Maharashtra government, GAIL India Ltd, NTPC Ltd and financial institutions.
| SHORT CIRCUIT |
| * Sixth turbine failure since 2005 |
| * Only two of six gas turbines supplied by GE functional at present |
| * Power generation has fallen to 300 Mw against the total capacity of 2,150 Mw |
| * Lenders refusing to share the revival cost |
| * Project revival cost has risen to above Rs 12,000 crore from Rs 10,000 crore |
| * Annual revenue losses of Rs 500 crore looming large on RGPPL |
| * Insurance cover for the project partly expired. Insurance companies shying away from the plant |
There have been five major turbine failures since the revival of the project in 2005. The turbine that failed this time was earlier sent to a GE workshop in Singapore for revival. The latest failure has left the company worrying about the entire revival process undertaken by GE.
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At the beginning of the current financial year, RGPPL had planned to generate about 10,000 million units (MUs) power. However, frequent tripping of GE-supplied turbines forced it to scale down its projections by more than half.
“We are now expecting to generate less than 4,000 MUs by the end of the year. This is adding to our revenue losses, which are expected to be over Rs 500 crore this year. It is not worthwhile any more to go on putting in more public money,” the official said.
Another area of concern for RGPPL is securing insurance cover. The insurance cover for block 1 has expired and while two other blocks will lose their cover in May this year. “No company is willing to provide insurance cover for the plant,” said the official, adding that GE is asking for modifications in machines, which means shutdowns and more revenue losses.
Asked why no performance guarantees were sought from GE, the official said, “The problem is that the restructuring of the project has relieved GE of all legal liabilities.”
Experts agree that the Dabhol power plant seems to have reached a deadlock due to faulty machines and unavailability of gas for the project.
“Everybody associated with the project is having a bad time. Faulty machines and unavailability of gas are two reasons why the plants has never given output in excess of 1,850 Mw. GE accepted recently that the turbines supplied to Dabhol were variants of what they had been supplying worldwide,” said a senior analyst from an accounting and consultancy firm. “It’s no more a liability issue for GE, it’s now an issue of reputation as they have a moral obligation to fix the turbines,” he added.
The situation is likely to increase problems for Maharashtra, which is relying on Dabhol to bridge a part of the huge shortfall in power supply. The state is facing power shortage of about 5,000 Mw and will have to look at alternative sources of power in days to come.