Maharashtra cabinet meeting on DPC tariff today

The state Cabinet will meet today to discuss a proposal which entails the Maharashtra State Electricity Board (MSEB) buying power from Dabhol Power Company (DPC) at Rs 2.30-2.40 per unit.

A report of the sub-committee of state ministers set up to look into the revival of DPC has also placed a cap of $24 per barrel on the linked tariff fluctuations. This means that any price escalation in international fuel prices above $24 would not be permitted to be factored into the power tariffs of DPC.

According to sources, the Rs 2.30-2.40 per unit rate was arrived at after conducting an assessment of the liquified natural gas power plants in the country and the tariffs charged by them. While this would form the variable cost of power, the fixed cost of power from DPC would take into account the outstanding liabilities of lenders to the 2,143 mw power plant.

Sources say that the Maharashtra government's plan is against an earlier proposal where the state had expressed willingness to purchase power from DPC for Rs 2.80 per unit a year ago. The Union government had also recently endorsed a proposal for facilitating the offtake of power from a revived DPC plant at that rate.

The state Cabinet will also discuss the allocation of a second installment of Rs 100 crore for development projects in the Vidarbha region under the Rs 747 crore package announced for the region by chief minister Sushilkumar Shinde recently.

Under the package, the state had released the first installment of Rs 100 crore for completing irrigation projects in the region. Of the Rs 747 crore package, irrigation projects will be provided Rs 347 crore, while the remaining amount is slated for other development projects.

The Cabinet will discuss on whether the Rs 100 crore should be totally allocated for irrigation projects or be utilised for part financing irrigation as well as other development activity.