Insurers shy away from Dabhol

Written by Sanjay Jog | Mumbai | Updated: Jan 5 2009, 06:35am hrs
Ongoing Dabhol project saga has taken yet another twist. Insurance companies are reluctant to renew insurance policies of the troubled 2,150-mw Dabhol project due to the frequent tripping of gas turbines and rotars.

Assets of Rs 9,000 crore are insured. The Ratnagiri Gas & Power Pvt Ltd (RGPPL), which possesses Dabhol power project assets since October 2005, is due to pay a premium of Rs 45 crore by end of January and part of which is May this year. This premium is for an insurance worth Rs 6,000 crore for two turbines.

RGPPL sources told FE on Sunday: The state-run National Insurance Corporation in association with other insurance companies has provided an insurance cover for the Dabhol power project assets. RGPPL has asked the National Insurance Corporation and other companies to renew the insurance cover. However, so far there has not been any response. The insurance companies have cited the frequent tripping of gas turbines and rotar as the major reasons for not being keen to renew insurance policies.

Due to the tripping of two turbines, the delays in the revival of phase I of 740 mw and the maintenance, RGPPL was able to generate mere 300 mw till December 30. However, it has increased the generation to 600 mw. RGPPL needs to mobilise about Rs 400 crore for the repairs of damaged turbines, they added.

RGPPL sources admitted that the GE supplied 9FA turbine is facing a recurring problem of failures. In the absence of a comprehensive maintainance and servicing agreement between RGPPL and GE, the latter was making all sorts of demand and it is causing problems in an early restoration of such broken turbines and rotar.

Currently, a four-member committee is examining an issue of how GE be asked to enter into a comprehensive maintainance and servicing agreement. However, GE has so far refused to provide an guarantee for the same.

Meanwhile, RGPPL sources said that the total revival of the project is yet again deferred to July as it will not be possible to meet the April deadline. This is because of delays in the restoration of damaged turbine. According to sources, RGPPL will not be able to generate 2,150 mw fully though a generation of 1,850 to 1,900 mw will be available from July onwards. The reduction in the generation is largely due to faulty turbine.