The Ratnagiri Gas and Power Private Ltd (RGPPL), erstwhile Dabhol project, may get a new lease of life.
The Government is working out the modalities to provide gas to run the 1967-MW power project, which otherwise would turn into a non-performing asset soon for not being able to repay loans.
“We are discussing different options that may be acceptable to all stakeholders. The final decision may be taken up by the Cabinet Committee on Investment or an empowered group of ministers (eGoM),” a senior Government official told
The first option is to include RGPPL along with fertiliser units in the overall gas quota for priority sector. In this case, the power plant may get around 3 mmscmd of gas.
RGPPL has been facing shortfall of gas from the Krishna Godavari (KG) D6 block since September 2011. After that, gas allocation was modified and the power station was allocated 0.9 mmscmd from ONGC marginal fields (through GAIL), and another 7.6 mmscmd from KG-D6. From March 2013, there was no supply from RIL-operated East Coast fields.
The power plant requires gas in multiples of 1.4 mmscmd to be able to run each gas turbine. For ensuring debt servicing and operating and maintenance expenses, RGPPL requires to run at least four out of the six gas turbines on a continuous basis.
The second option is to pursue with Maharashtra, which buys electricity from the project, to purchase electricity generated from R-LNG (imported gas) for ensuring the project’s viability and pay the corresponding fixed cost.
RGPPL’s annual fixed cost of the power business is about Rs 2,000 crore and it requires close to Rs 1,500 crore for debt servicing and operation and maintenance costs.
According to estimates, the Maharashtra State Electricity Distribution Co Ltd (MSEDCL), after running one turbine on domestic gas and three on imported gas, would have to pay 25 paise/unit for 2014-15 and 21 paise/unit for 2015-16.
The third option is diverting gas from non-core sector to the power plant. Nearly 4.7 mmscmd of domestic gas supplied to the non-core sector industries may be diverted to RGPPL till sufficient volumes are available from KG-D6.
The last option is to pool Administered Price Mechanism (APM) and non-APM gas in the power sector. The total allocation of domestic gas from APM, non-APM, Panna-Mukta and Tapti to the power sector is about 38.55 mmscmd. If these volumes are re-distributed equitable, RGPPL may get 3.15 mmscmd, which will enable it to recover 50 per cent of the fixed cost.
RGPPL has been defaulting on its debt servicing payments since September 1 due to its inability to recover fixed cost and faces the prospects of turning into an NPA.
MSEDCL has said it cannot to pay more than Rs 4/unit. Running this plant on imported gas will make electricity expensive to the tune of Rs 10/unit.
NTPC and GAIL holds 32.86 per cent each in RGPPL, MSEB Holding has 17.41 per cent and remaining 16.87 per cent in hold by financial institutions such as IDBI, SBI, ICICI Bank and Canara Bank.
Bankers’ plea State Bank of India Chairman Arundhati Bhattacharya and ICICI Bank Managing Director & CEO Chanda Kochhar have sought the Power Ministry’s help to prevent their loan to RGPPL from turning into an NPA.
siddhartha.s@thehindu.co.in