Saturday, September 1, 2001

Godbole panel submits final report

Dabhol power tariff pegged at Rs 2.40 per unit

DH News Service
MUMBAI, Aug 31

Maharashtra's Godbole Renegotiations Committee has recommended financial restructuring of Dabhol power project in such a way to ensure that the tariff does not exceed Rs 2.40 per unit, which would be a competitive price for power to be absorbed by the state electricity board (MSEB) as well as to be sold to states like Karnataka. The committee met here on the second day today and after finalising the report, submitted it to the state government. The committee chairman Dr Madhav Godbole told Deccan Herald that the report contained various recommendations which could be followed by the government to negotiate the Power Purchase Agreement (PPA) with a new party that would replace Enron as the major stake holder in the Dabhol project.

In fact, the experts panel proceeded with an assumption that Enron would quit the project, as indicated by Enron's global chairman Kenneth Lay and other functionaries, including Enron India's K Wade Cline, on number of times. After holding five rounds of talks with Enron, the panel simply ignored the multinational and went ahead with finalising its report.

The ceiling of Rs 2.40 per unit as tariff as suggested by the panel is much below than Rs 3.50 reportedly offered by Enron. The power producer had been charging a whopping Rs 7.80 per unit to MSEB till the latter stopped drawing power from Dabhol in May end.

Godbole panel to continue: With submission of the report, the Godbole committee does not cease to exist. Dr Godbole said the government has requested the panel to continue and negotiate the PPA with the new buyer of Enron's stake in Dabhol and help government work out the deal. He said when the new party appears on the scene, the committee will re-activate itself, but till then it won't meet again.

Explaining the rational behind the panel's recommendation for Rs 2.40 per unit cost as the upper limit, Dr Godbole said the MSEB, whose chairman Vinay Bansal is a member of the committee, is ready to draw Dabhol power only at that tariff and that too from the 740 mw phase I of the project. The MSEB's need was 30 per cent of that capacity and the remaining power could be sold to states including Karnataka to ensure 90 per cent plant load factor, he added.

The talks between the committee and Enron had reached a deadlock on July 27 as they failed to resolve the dispute over high tariff and Dabhol's phase II of 1,444 mw. Karnataka and three other states had shown interest in buying power but at a much lower tariff sans any guarantees, while Enron insisted on iron clad guarantees coupled with full off take of its power first followed by price negotiations.

Dr Godbole refused to comment upon various proposals mooted by Indian and international lenders to Dabhol project and said it was for them to look for a new buyer for the 2,184 mw project. He added that the committee has recommended the government to make its report public. The copies of the report were sent to the chief minister's office as Mr Vilasrao Deshmukh was away in Delhi, to energy minister Dr Padmasinh Patil, minister of state for energy Rajendra Darda and energy secretary Vinay Bansal.

Today's meeting was attended by Mr Godbole, Mr Bansal, Dr E A S Sarma and the central government's representative A V Gokak. HDFC Chairman Deepak Parekh, who is a member of the panel, could not attend the meeting but had endorsed the report, Dr Godbole said.