The empowered group of ministers (eGoM) meeting on Ratnagiri Gas and Power Private Ltd (RGPPL), also known as Dabhol, will hold another round of talks on 20 March because they were unable to take a decision even after two hours of deliberations.
The eGoM, headed by external affairs minister Pranab Mukherjee, has invited Maharashtra chief minister Vilas Rao Deshmukh as a special guest for the meeting.
“Though the marathon meeting went on for around two hours, no conclusive decision could be taken. We have now called the Maharashtra chief minister to participate in the meeting tomorrow at 6pm,” a senior cabinet minister who attended the meeting told Mint.
In its last meeting, the eGoM had recommended that the power generated by the Dabhol power project be sold to the highest bidder to help absorb some of the cost overruns on a project six years behind schedule. Previously, the power generated from this project was meant to be sold only to the Maharashtra State Electricity Board (MSEB).
Dabhol is symbolic of infrastructural bottlenecks in India’s ambition to solve its electricity crisis. The project’s revival cost has escalated by about Rs2,594 crore to Rs12,897 crore. This will result in power being generated at a cost of Rs3.23 per unit. It is this cost escalation that no stakeholder wants to share. “Efforts are being made to bridge the cost escalations that have affected the project’s progress,” a senior cabinet minister who attended the meeting told Mint.
The government had set a firm deadline for the plant to be fully operational, using gas to produce power. “All the three units of the project will become fully operational by November 2007,” Power Minister Sushil Kumar Shinde had earlier said.
The vendors associated with the project have also not been paid. One of the vendors, Vessco of Korea, wants the payment for building the break-water facility for berthing of LNG-laden ships by 2 April. The company has threatened to approach the Korean courts, if the payment is not made. While NTPC Ltd and GAIL (India) Ltd hold the majority stake in Ratnagiri, MSEB has 15%. The lender banks hold minority stakes.
Both NTPC and GAIL had put Rs500 crore each as equity in the project with the lenders collectively pumping in Rs500 crore. The project holds a lot of importance for Maharashtra, whose power demand has touched over 16,000MW with a daily deficit of around 5,700MW. “The Maharshtra CM has been called as the state is a major stakeholder. It is the state which has to sign the power-purchase agreement for the project,” the minister added