Report cautions Maharashtra on PPAs

By Mahesh Vijapurkar

MUMBAI, APRIL 14. A caution that any effort to continue with the proposed power purchase agreements (PPAs) with Reliance and Mittals for major projects in Maharashtra ``will only result in a problem similar to that of the Dabhol Power Company (DPC) re- emerging in future'' has been sounded by the Madhav Godbole Committee.

The committee - major findings of which have been publicised - expressed fears on ``allowing these independent power producers to proceed, as currently structured''. The two projects, one in Patalganga and another in Chandrapur, also have substantial import content.

These projects, the committee said, have to be ``re- examined in accordance with a Least Cost Plan and in any case, till such time the demand level in the State permits full absorption of power'' from these independent power producers. It may be recalled that all arithmetic, including demand projections by the MSEB, have gone awry in the Enron-sponsored DPC.

Neither of the two projects is contractually structured to meet the needs of intermediate and peaking load in the MSEB or Maharashtra itself. The MSEB needs to justify projections in more detail ``before proceeding with these projects'', the committee said. The MSEB's power procurement policy till the Maharashtra Electricity Regulatory Commission stepped in was not according to a least-cost plan. In fact, the MERC's least-cost option unsettled the purchase option from the DPC, forcing it to limit the maximum offtake to around 50 per cent of the contractual obligation.

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Section  : National
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