The Maharashtra government is trying to rope in Bharat Petroleum Corporation (BPCL) for the supply of naphtha to re-start the first phase of the beleaguered Dabhol power project.
BPCL and the state government are exploring at the prospect of entering into a pact that would entail supply of at least 30,000 metric tonne of naphtha per month. A BPCL official said: "We have quoted a price for supplying naphtha to the state government and are awaiting the final word from the government."
The state government is keen on BPCL as the corporation has a refinery at Mahul near Mumbai and thus the cost of supply will be lower. This, in turn, will substantially bring down tariffs. The attempt to rope in BPCL is significant as most of the naphtha was imported when the Dabhol power project was operational between May, 1999 and June 2001.
Due to exchange rate fluctuations, the cost of naphtha rose to as much as Rs 8 per unit since fuel costs are a pass through. This, in turn, led to a payments dispute between MSEB and Dabhol Power Company which led to the rescinding of the PPA. The plant has suspended operations since June 2001.
Enron Corp, General Electric and Bechtel, which hold a combined stake of 85 per cent in the Dabhol Power Company, decided to exit the project. Subsequently, Enron Corp filed for bankruptcy in the US and the lenders took over the assets for care and preservation.
Last year, the state government agreed to offtake 658 mw from the first phase at Rs 2.80 per unit and 83 per cent PLF. The decision was prompted by the acute power shortage in the state. The total capacity of the Dabhol project was pegged at 2,184 mw and the peak shortage experienced by the state is about 2,000 mw.
