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The 1,967-Mw Dabhol power project in Maharashtra won’t be a non-performing asset (NPA), at least for a while, as the Ratnagiri Gas & Power Pvt Ltd (RGPPL) made a part re-payment of Rs 151 crore to its lenders before the end of the financial year on Monday.
The Maharashtra State Electricity Distribution Company (MahaVitaran), which procures almost 95 per cent of power from the project, has bailed out the cash-strapped RGPPL by paying Rs 151 crore of its total arrears worth Rs 1,573 crore towards power purchase. The payment was made on March 28.
MahaVitaran has agreed to pay to RGPPL following the Centre’s intervention in a bid to avoid a major embarrassment, especially during campaigning in the general elections. The Dabhol project, revived in May 2006, has been closed since December 28 last year for want of gas.
“Had the Rs 151 crore not been received from MahaVitaran, lenders, including SBI, ICICI Bank, IDBI Bank and Canara Bank would have declared the Dabhol project an NPA after March 31, for its inability to mobilise Rs 108 crore towards the monthly debt repayment instalment. The firm is unable to do so due to the frequent closure of the power plant and also problems in the recovery of power purchase dues from MahaVitaran and other procurers. RGPPL has a total debt of Rs 8,500 crore,” an RGPPL official told Business Standard.
A MahaVitaran official confirmed that MahaVitaran’s payment of Rs 151 crore to RGPPL. “Ultimately, consumers are expected to bear an additional rate burden of 0.003 paise a unit as it is a pass through due to its payment to RGPPL,” the official said.
Also, GAIL India has agreed to supply 2.8 million standard cubic metres per day of gas a day, so that the Dabhol project can daily generate 600 Mw for the next two months.
“We have provided the power supply schedule to MahaViataran. However, MahaVitaran has rejected our offer citing that it has 24x7 power. Further, MahaVitaran insisted that the power be supplied below Rs 3.50 a unit against Rs 4.50 a unit, which is approved by the power regulator,” the RGPPL official informed.
The project needs a total of 8.5 mmscmd to operate fully at 1,967 Mw capacity. Of the 8.5 mmscmd, 7.6 mmscmd of gas was assured from KG D-6 Basin and 0.9 from marginal gasfields of ONGC (through GAIL).
The MahaVitaran official argued that RGPPL should not switch-on-switch-off the project and send the supply schedule after it receives gas. “Compared to 2005, the power situation in Maharashtra is totally changed. MahaVitaran is able to supply 24x7 power supply and it is the leading utility across the country, with long term power purchase agreements for 19,000 Mw. During exceptional cases, due to weather fluctuations, MahaVitaran resorts to short term power purchase contracts,” the official noted.
Further, the official said RGPPL should ensure 80 per cent plant load factor at 1,967-Mw capacity continuously for a year. “The sudden closure and revival for a short period of the Dabhol project has shifted the economics of the power sector. The non-availability of assured gas by the Centre is the real cause for the Dabhol project becoming unviable. MahaVitaran is not at all responsible for the same. MahaVitaran is not in a position to procure Dabhol power in the present situation when it has adequate power to supply 24x7 power in the state,” the official added.
