PPA glitch forces NHPC to scrap Ratnagiri project

National Hydroelectric Power Corporation (NHPC) has officially decided to shelve its 38 MW hydel power project "" Bav Project Stage-I and Stage II ""envisaged at Ratnagiri in Maharashtra.

This decision came after NHPC failed to sign Power Purchase Agreements (PPA) with some of the beneficiary states as the states found its rates high.

"Keeping in view the uncertainty in signing the PPA and higher tariff, NHPC decided to close the above projects," said officials from the company.

The hydel power major had initially planned to set up the a 50-MW Bav Project Stage-II plant, which was found unviable in the feasibility reports due to high tariff.

Later, NHPC submitted another revised bid, where it scaled down the generation capacity to 20 MW. This was ascertained commercially viable by the Central Electricity Authority (CEA) earlier last year.

The idea was to commission Bav -II, which would be followed by 18-MW hydel power plant "" Bav Project Stage-.

According to the project report, cost of the first year tariff without free power to Maharashtra was estimated at Rs 3.50 per unit, while levelised tariff without free power was calculated at Rs 3.47 per unit.

Though CEA accorded commercial viability to Bav-II earlier this year, yet NHPC decided to shelve the project because the power utilities in Maharashtra found the rates too high and refused to enter into PPA with NHPC forcing.

In a parallel development, NHPC also officially shelved its 710 MW Koel Karo hydel project in Jharkhand. NHPC also cited similar reasons for shelving Koel Karo.

Meanwhile, NHPC has targeted a Rs 800 crore net profit in 2004-05 against Rs 621 crore achieved in the pervious fiscal.