Sources in KSEB told The Financial Express that top brass of KSEB and NTPC would meet in the first week of July to find a solution for the lingering row over power tariff of the Kayamkulam power plant. Both the public sector undertakings have locked horns over the price of the power generated from the 350-mw nahptha-based power station at Kayamkulam.

While, NTPC has sought a tariff to the tune of a shade lower than Rs 4 per unit, the SEB has declined to budge, describing the NTPC demand as outrageous. The cash-strapped SEBhas cited tariffs quoted by units built on similar platforms, which were considerably lower than the the tariff sought by NTPC.

However, the two sides had agreed to an interim tariff of Rs 2.75 per unit in a bid to ensure cashflow of the project. The interim tariff is being paid for meeting the variable cost of the project, mainly the price of naphtha.However, sources said the thermal power major had asked the SEB to raise the interim tariff from the current level of Rs 2.75 per unit to Rs 3.05 to meet the escalation in the cost of naphtha. However, the SEB has not responded to this demand so far.

It is learnt that the two sides would have a final talk in July first week to clinch an amicable deal on tariff. In view of the discussion, the SEB has sought full operational details from the NTPC management regarding the Kayamkulam plant, including the heat rate factor and other technical nitty-gritty of the project. "We are treating NTPC as any other IPP," the source said, adding that the talks would coverthe entire gamut of areas pertaining to the cost and pricing of the project. However, sources added that NTPC had not so far responded to KSEB's demand. Both the public sector bodies met last year at New Delhi to reach an amicable solution on the contentious tariff issue. However, the discussion ended without yielding any result.

The tariff issue was likely to find its way to CERC for arbitration as both sides failed to resolve the issue before May 15, sources said.