Cab sec for a relook into Dadhol project finances

Written by Sanjay Jog | Mumbai, Aug 26 | Updated: Aug 28 2008, 05:26am hrs
Cabinet secretary KM Chandrashekhar, who is currently keeping an eye on an early revival of Ratnagiri power project has emphasised a need to rework the financials of the 2,150 mw project.

He has asked the secretaries of power and financial services to come up with a fresh set of financial projections, taking realistic and achievable assumptions, under both the options retaining the LNG terminal with the existing Dabhol owners or hiving it off.

The project, which continues to face trouble for one or the other reason, is running below capacity, thanks to the inadequate gas supply and frequent trippings and damages of GE supplied turbine and rotars. This has also resulted in the commissioning of phase I which is under repair.

Cabinet secretarys directive is crucial as the lenders to the project have declined to share further financial burden following the cost escalation and delays in the revival. The Ratnagiri Gas & Power Pvt Ltd sources (RGPPL) told FE that the project was meant to be completed at a cost of Rs 10,038 crore. This included Rs 870 crore as completion cost and Rs 683 as interest during construction. The completion cost and the interest during construction (IDC) had subsequently shot up to Rs 2364 crore and Rs 2413 crore respectively. The lenders were willing to absorb Rs 466 crore of escalation and finally, agreed to take in another Rs 455 crore.

On the availability of gas for the project, RGPPL sources said that cabinet secretary suggested that the secretaries of power and petroleum should resolve the issue on their own and arrive at a solution that will ensure that adequate gas is supplied to Dabhol. Petronet LNG Ltd`s (PLL) Dahej LNG terminal is currently under partial shut down on account of equipment failure. It will take a while before full capacity at the terminal can be restored. As a consequence, gas supply to the Dabhol plant is down to 1.4 mmscm as against an allocation of 5.4 mmscmd to fire two of the three power blocks in the complex.

Following the intervention of the power ministry and the Maharashtra government, gas has been increased temporarily to 2.3 mmscmd which is not adequate.

Though the power plant has not been able to utilize the full quantum of gas on account of failure to get both the power blocks up and running, RGPPL authorities have demanded that at least 2.8 mmscmd of gas be supplied to ensure that 600 mw of power of a total capacity of 2,150 mw is generated.