Tech snag adds to power woes

Mumbai, Jan 22 | Updated: Jan 23 2007, 05:57am hrs
Even as the petroleum ministry and the power ministry are striving to keep the Ratnagiri power project up and running, power generation from one of the two gas turbines has been stopped due to serious damage in blades.

This has resulted in Ratnagiri Gas & Power Pvt Ltd (RGPPL), which got possession Dabhol project assets in October 2005, generating only 350 mw from the second block, against a capacity of 740 mw. This has added to daily power deficit in Maharashtra. The state is finding it difficult to meet the ever-increasing power shortfall of around 5,000 mw. The gas turbine will be repaired and brought back to operation only after two months. It means the project could generate about 350 mw and it will be supplied to the Maharashtra State Electricity Distribution Company, which as the sole buyer has an ad-hoc arrangement till March- end with RGPPL. The project is run on naphtha and the power is sold to MahaVitaran at Rs 5.10 per unit, sources told FE.

As reported by FE, the project has every danger to close down if GAIL India, which holds 28.3%, fails to complete Dahej-Uran and Panvel-Dabhol pipelines by March-end to supply gas it wants to procure from the Petronet LNG Ltd. Moreover, the RGPPL has power sale agreement with Maha Vitaran till March-end.

If RGPPL fails to keep the power tariff below Rs 3, Maha Vitaran has already expressed its inability to procure power from the project.

The issue was discussed at length at the last week's meeting of the empowered group of ministers (EGoM).

The EGoM has directed GAIL India to complete the gas pipelines as per schedule and try to enter into long-term gas supply agreement with various gas suppliers across the world. Power secretary RV Shahi was optimistic that the tariff would be below Rs 3 from April, as the ministry was considering financial restructuring of the project. The EGoM has given its approval for gas price pooling, to be done by Petronet LNG Ltd whereby the cost is worked out at Rs 2.87 per unit with customs duty and Rs 2.83 per unit without customs duty.

Sources, however, said that it was to be seen whether RGPPL would be able to operate all three blocks- with a capacity of 740 mw each - from April. They also expressed concern if the repairing work of the damaged gas turbine is delayed further.