Our Bureau

The Chief Minister said that he was hopeful that the controversial Dabhol power project would be revived by July next year. Maharashtra could get around 700-750 MW with the revival of the first phase of the Dabhol project.

Mr Vilasrao Deshmukh

Mumbai , May 10

THE power crisis in Maharashtra has brought to nought the Democratic Front's pre-election promise of free electricity to farmers.

From June this year, farmers in the State will have to pay for the power they consume, although the subsidy on tariffs would continue, the State Cabinet decided today.

"By discontinuing this scheme we will save Rs 500 crore a year. Rampant use of free power for agriculture pumps has not only led to power shortages but has caused drastic reduction in ground water levels," said the Chief Minister, Mr Vilasrao Deshmukh, speaking to newspersons after the Cabinet meeting.

Free power had cost Maharashtra Rs 1,700 crore since the scheme was introduced in July last year, said Mr Deshmukh.

The decision had to be taken in view of the severe power shortage in the State, he added.

The savings of Rs 500 crore can be directed towards improving power infrastructure in the State, which has witnessed near riots over power shortages over the last few weeks.

The Maharashtra State Electricity Board (MSEB) charges agricultural pumps an annual tariff of Rs 2,100 per horsepower (HP) in well-irrigated areas. The tariff is lower, at Rs 1,800 per HP, in drought-prone regions.

Before the free power scheme was announced, farmers had to pay a subsidised annual bill of Rs 700 per HP while the Government compensated the MSEB the remaining amount.

With over 23.35 lakh agricultural pumps operating in Maharashtra, the total subsidy cost to the Government worked out to Rs 1,200 crore.

Come July, farmers owning pumps with less than three HP will be charged an annual tariff of Rs 500 per HP. Those using larger pumps will pay Rs 700 per HP.

The Chief Minister said that he was hopeful that the controversial Dabhol power project would be revived by July next year.

Maharashtra could get around 700-750 MW with the revival of the first phase of the Dabhol project.

A Union Cabinet sub-committee was discussing the revival of the Dabhol project to help Maharashtra tide over the acute power shortage, he said.

"We have already conveyed to the Centre that the State Government is ready to buy Dabhol power at Rs 2.20 per unit. Our role will be clear only when a final decision is taken and the process of framing the new power purchase agreement begins," Mr Deshmukh said.

Mr Dilip Walse-Patil, Energy Minster, said that the State would fix meters on all agriculture connections within a year.

He added that the State Government was exploring the option of acquiring coal blocks in Maharashtra and Orissa, in view of the depleting coal reserves in Maharashtra.

Current reserves are expected to last only 20 years, Mr Walse-Patil said.

Mr Deshmukh, who is scheduled to meet the Prime Minister, Dr Manmohan Singh, on Wednesday, will submit the State's list of priorities and its requirements expected from the Centre to tide over the power crisis.

Today, the State Government also gave its approval to several power projects such as the 1,040 MW Uran expansion project, the 1,400 MW Talegaon-Dabhade power project (both gas-based), and the 500 MW Khaperkheda thermal power project, besides a joint venture of the Maharashtra and Chhattisgarh electricity boards.

Mr Walse-Patil said that the Uran expansion and the Talegaon-Dabhade gas-based power projects would require a funding of Rs 12,000 crore, of which 80 per cent will be financed by Power Finance Corporation of India Ltd, with the State chipping in with the rest.

© Copyright 2000 - 2009 The Hindu Business Line