New Delhi: The Dabhol power project owned by cash-strapped Ratnagiri Gas and Power Pvt. Ltd (RGPPL) is yet to be fully commissioned, but an additional capacity of at least 2,000MW is already being planned at the same location with an investment of around Rs8,000 crore.

While the project was originally planned with a generation capacity of 2,150MW, it was scaled down because of problems with equipment. The project is currently generating around 950MW and RGPPL is hopeful of reaching full capacity generation of 1,950MW by March.

“We are seriously looking at adding 2,000-3,000MW at the same location," Union power secretary H.S. Brahma told Mint. “While the total RGPPL project area is around 1,700 acres, around 900 acres is open. The LNG (liquefied natural gas) terminal is already there. It is the most ideal location to put up a gas-based power project."

Ideal location: A file photo of the Dabhol power plant. NTPC chairman and managing director R.S. Sharma says the firm is willing to invest in the planned 2,000-3,000MW power project near the existing facility. AFP

Any increase in capacity will help power-starved Maharashtra. According to data from the Central Electricity Authority, the country’s western region is the worst-hit by power shortages, with an electricity deficit of around 12.5%.

Maharashtra has a power deficit of 17.6%. The state had power supply of 42,098 million units for April-August, compared with demand for 51,090 million units.

When asked about, who would invest the money in the additional capacity, Brahma said, “If GAIL is not ready, NTPC can put in the money."

A.K. Ahuja, managing director, RGPPL, said, “RGPPL cannot set up this additional capacity due to its balance sheet. NTPC alone or along with the Maharashtra government can set up this project. Land can be sold to NTPC at market rates. The state government is ready and willing to set up this additional capacity in a joint venture with NTPC."

Subrat Ratho, principal secretary, energy, Maharashtra, and managing director, Maharashtra State Electricity Board Holding Co. Ltd, said, “We have not received any formal proposal but it is an excellent idea. We welcome it and we will be happy for a joint venture with NTPC."

Dabhol’s project cost for the initial capacity was originally estimated at Rs10,038 crore, which was revised to Rs11,998 crore. The latest revision pegs the project’s cost at Rs12,182 crore.

The Dabhol LNG terminal to be operated shortly will initially have a capacity of 1.2 million tonnes per annum (mtpa), which will be increased to 5 mtpa by 2010.

While GAIL chairman and managing director B.C. Tripathi did not respond to phone calls or to a message left on his cellphone, NTPC chairman and managing director R.S. Sharma said, “We are examining the proposal. All the required infrastructure is available there. If we are given the land, even NTPC can put up the additional capacity. If RGPPL is not willing to put up the investment, we will be more than willing to invest. There are many stakeholders."

Dabhol was conceived in the 1990s and was originally promoted by Enron. It ran into trouble soon after, with the government with which the US company had signed the agreement losing in the polls to the state assembly, and the new government questioning the high cost of power the plant would produce. The plant was taken over by the new owners after Enron’s collapse.

“For a proposition as significant as this to work successfully and to meet the desired end-to-end objectives keeping in mind the value proposition of all stakeholders, it is important to maintain highest standards of integrity and transparency," said Monish Chatrath, executive director at consultancy Mazars India.