The article "Another scam in the making" (December 23) does not take into consideration the sharp rise in international prices of oil and gas since the last production sharing contract governing the Krishna Godavari (KG) basin concession was signed. Even after doubling the gas price from January 1, 2014, the KG basin gas will be cheaper than the gas imported by GAIL. The government cannot skirt behind technicalities but must take pragmatic views. The Dabhol power plant in Maharashtra is a case in point. The Ratnagiri Gas & Power Pvt Ltd (RGPPL), as a gas-based plant, cannot supply power at a rate determined by the regulator and has become sick in the process. RGPPL has been defaulting in monthly debt servicing as it was unable to receive necessary payments from the Maharashtra State Electricity Distribution Company (MahaVitaran), which buys 95 per cent of the power produced in the state under the power purchase agreement. Banks are now threatening to declare the Dabhol plant a non-performing asset.
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M M Gurbaxani Bangalore
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number