NTPC proposes to add Dabhol to Telangana package
NTPC, which has invested Rs.974.31 crore in RGPPL, has communicated the proposal to the power ministry. The other stakeholders in RGPPL are GAIL (India) Ltd, which also owns 32.86% in the utility, the Maharashtra government with a 17.41% stake, and state-run banks and financial institutions.
"The project is lying idle. We want Dabhol to be pitched for as a
part of the Telangana package. It will take around four years to build a
new power project to cater to the demands of Telangana," said an NTPC
executive requesting anonymity. "In such a scenario, it makes sense to
leverage a capacity which is lying idle."
In its letter to the power
ministry, NTPC has said that since its investment in RGPPL is going to
be a non-performing asset (NPA), it will affect its market reputation as
it is a publicly traded company.
One of the two options proposed by
the utility is to run the project on imported liquefied natural gas
(LNG) and be dedicated to Telangana to meet its electricity demand;
wherein the subsidy portion on account of difference between the
domestic gas cost and imported LNG be provided under the package.
According
to the power-purchase agreement between RGPPL and Maharashtra State
Electricity Distribution Co. Ltd (MSEDCL), in the event of LNG being
used as a fuel, MSEDCL has to approve it. With LNG being expensive than
domestic fuel, and the uncertainty over the availability of fuel in
India, MSEDCL is averse to buying expensive electricity. According to
RGPPL, MSEDCL owes it Rs.1,112 crore in electricity dues.
"I am of
the view that the plant that has been built should run and the
electricity be used. The plant is ready," said B.C. Tripathi, chairman
and managing director of GAIL.
The other option suggested by NTPC is
to allocate 4.5 million standard cu. m per day (mscmd) of gas at parity
with the fertilizer sector. A power ministry official confirmed NTPC's
proposal. He declined to be named.
"With no new gas coming, NTPC
wants to give power to Telangana as part of the package," said the power
ministry official cited above. President Pranab Mukherjee has given
time to the Andhra Pradesh assembly to return the AP Reorganization Bill
till 23 January.
The Dabhol plant requires 9.7 mscmd of gas, but has
been allocated 8.5 mscmd by a panel of ministers, of which it receives
only 0.9 mscmd.
There is a danger of the project being classified as a
NPA in the backdrop of an ongoing financial crisis. Mint reported on 31
December about RGPPL dipping into its insurance reserves to service
Rs.139.12 crore in September dues to its debtors.
RGPPL has a debt of
around Rs.8,500 crore, with an outstanding debt service obligation of
Rs.837.94 crore for the current fiscal year. While an NTPC spokesperson
in response to queries emailed by Mint said, "Yes, the above information
is correct," a top power ministry official, who also didn't want to be
identified, said "as of now, there is no proposal 'within the ministry'
to make Dabhol a part of any such package".
RGPPL, earlier known as
Dabhol Power Co., was conceived in the 1990s and originally promoted by
the now-bankrupt US energy company Enron Corp. The asset was transferred
to the government in mid-2005, with the project fully commissioned on
31 March 2010. As of 30 November, Rs.424.18 crore was paid to the
lenders.
In : POWER NEWS