MSEB sources told The Financial Express on Tuesday that in this regard, it has already written to the Centre, which has already decided not to offer counter guarantee to Independent Power Producers (IPPs). MSEB, which has picked up 30 per cent equity in the $2501.2 million Dabhol power project, has taken up the issue with the Centre as lenders to Enron had sought such confirmation. The financial closure for the projects' phase I was achieved in March 1995, with debt coming from the US Exim Bank ($298 million), Overseas Private Investment Corporation ($100 million), a syndicate of Indian banks led by the Industrial Development Bank of India ($95 million) and from the Bank of America and ABN-AMRO which are jointly lending $150 million.

"The Centre shortly will issue aconfirmation letter while laying down certain conditions," MSEB sources said. It must be mentioned here that the state government has given a guarantee to the DPC for the second phase and an escrow has been given by both MSEB and state government.

The MSEB move assumes significance especially when the Enron board is visiting the city and holding a series of meetings with the chief minister Narayan Rane, deputy chief minister Gopinath Munde, chief secretary P Subrahmaniam and MSEB chairman Asoke Basak.

MSEB would like to know when DPC will commence commercial operations and financial closure for the second phase of 1444 mw. Munde said that the DPC, which is now taking trial runs, will commence production by the end of this month or early March. The second phase is expected to be completed by December 2001.

Dabhol's phase I will see one GE STAG 9FA combined cycle unit and OEN GE 6B combustion turbine commissioned, while phase II will see two more STAGs being added. Each STAG unit is composed of two 9FAturbines, two heat recovery steam generators and a steam turbine generator.

According to MSEB estimates, DPC's first phase will generate 5,000 million units, in addition to 55,000 million units by MSEB. The weighted average cost which is given at Rs 1.50 will go up to Rs 1.55, if DPC's cost per unit is assumed at Rs 3. MSEB believes that the additional power will help overcome the peak demand, which has touched a record 9,700 mw this week. MSEB which is facing a shortfall of about 900 mw during peak period, has already resorted to load- shedding in various parts of the state.

MSEB will have to shell out about Rs 50 crore initially, to pick up 30 per cent equity in the second phase. In all, MSEB will have to make a provision of Rs 450 crore for this purpose. However, it does not see any problem on this front.