The Maharashtra Government on Tuesday has announced a series of fiscal incentives for the beleaguered Dabhol power plant, which will enable it to start pumping out about 500 MW power by November 1. The incentives include waiver of local taxes and power wheeling charges.

Since the State Government holds 13.5 per cent equity in the Ratanagiri Gas and Power Pvt Ltd (RGPPL) the holding and operating company of the plant, it has a major say in the affairs of RGPPL.

State Energy Minister, Chandrakant Bawankule told media persons that the State Cabinet has decided that the project would be given relief from Value Added Tax (VAT), Entry Tax and Octroi for two years. Similar to the waiver provided by the Centre for inter-state power transmission, the Maharashtra State Electricity Transmission Company has decided to knock-off the wheeling charges on power generated by the Dabhol plant. The State stands to lose ₹350 crore of taxes from RGPPL per year, he said.

RGPPL will be demerged into two separate companies, the main company will run the power project and LNG terminal, which is in the close vicinity of the plant. The Indian Railways are in the process of entering into a long-term power purchase agreement at ₹4.7 per unit cost.

Bawankule said the State Government could procure power from the plant only after two years, provided the plant gets stable gas from the Centre.

Across the country there are 14,300 MW of gas-fired power projects in the country, which are not functional and the 1,964-MW Dabhol plant is one of them.

The Centre has initiated Power System Development Fund (PSDF) to revive the plant and all stake holders will have to bear some loss for reviving the plant, he said.

He said due to ₹7,800 crore debt, the plant is on the verge of being declared a Non-Performing Asset by the banks.

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