The state cabinet today sanctioned a proposal for drawing 50 per cent of power produced from phase-I of Dabhol Power Company (DPC) at Rs 2.25 per unit on an ad hoc basis.
The state also subsidised the tariff, of Rs 1.25 per unit, chargeable from powerloom units in the Bhiwandi industrial township.
Chaggan Bhujbal, deputy chief minister, said: "We have decided to draw 50 per cent of power from phase-I of the DPC project. This would be temporary. The proposal will be forwarded to the Maharashtra Electricity Regulatory Commission (MERC) for its approval."
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Financial institutions, led by IDBI, have been pressurising the state and Central governments to ensure that the power plant is kept in running condition, so that an asset sale fetches a fair price and keep in check a possible deterioration of the plant.
A senior government official said, "The cabinet meeting witnessed serious differences between the various alliance (Democratic Front) partners on the issue of setting up a special purpose vehicle (SPV), called Maharashtra Irrigation Finance Corporation (MIFC), which would raise funds from the market for irrigation projects across the state."
The governor of Maharashtra had directed the state government to set up a single vehicle in place of the existing four irrigation corporations -- the Krishna Valley Development Corporation, Vidharba Irrigation Corporation, Marathwada Irrigation Corporation and the Western Maharashtra Irrigation Corporation -- in order to correct the regional imbalances in the state.
While chief minister Vilasrao Deshmukh has been particularly keen to push through the formation of the MIFC, through which an equitable distribution of funds generated were directed by Alexander, cabinet ministers hailing from western Maharashtra have been consistently seeking a review on the directives.
Two earlier representations made to the governor by the elected representatives from this region failed to translate into a rollback of the directives by the governor.
The MLAs from western Maharashtra are upset by the governor's new formula worked out for computing the fund allocation to the three regions (Vidharba, Marathwada and western Maharashtra). They said the formula would mean a reduced allocation to the sugar belt (western parts of the state).