According to sources close to the development, the PPA is expected to be signed in one or two days, and before July 5 it plans to restart production. The plant has been shut since 2013 for want of domestic gas supplies.
Initially, the railways may sign a short-term PPA for around four months, and later it may increase the period, the sources said.
The plant was earlier supplying 95 per cent of generation to Maharashtra, 2 per cent each to Dadra & Nagar Haveli and Daman & Diu and the remaining 1 per cent to Goa.
RGPPL, a joint venture between gas utility GAIL and NTPC, shut the Dabhol plant after gas supplies from Reliance Industries KG-D6 fields were stopped.
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GAIL and NTPC hold 32.9 per cent stake each in RGPPL while the Maharashtra government owns 17.4 per cent stake.
Besides, RGPPL is also looking at procuring imported gas. "With the domestic and imported gas, the company will be in a position to run the plant in full capacity," the source said.