LNG for Dabhol project in doubt

Union Power Minister Sushilkumar Shinde has expressed doubts about the availability of liquefied natural gas (LNG) for running the revived Dabhol power project in Ratnagiri district. Speaking while unveiling the Rs. 15,000-crore blueprint for fortifying Maharashtra's power sector here on Wednesday night, Mr. Shinde said that even though LNG was supposed to be made available by March 2007, he was not sure that would happen.

The Dabhol plant, which started generating power on April 30 this year, provided about 700 MW in summer to a State that has a shortfall of about 4000-4500 MW. However, after stocks of naphtha ran out two months later, the plant is now waiting for fuel to restart.

Fuel linkages

Maharashtra Chief Minister Vilasrao Deshmukh stressed the importance of fuel linkages for power plants. This assumes significance as the Rural Electrification Corporation (REC) will fund the Maharashtra power sector to the tune of Rs. 15,000 crore which will result in a major turnaround in the power situation in the next two or three years. The REC will disburse financial assistance to the three power utilities in the State dealing with the generation, transmission and distribution sectors.

In addition, Mr. Shinde announced that the Power Finance Corporation (PFC) would provide funding to the tune of Rs. 10,000 crore for completing various projects in the State. It is for the first time that the REC will be providing such a massive amount of funding to any State and Mr. Shinde hoped that it would completely turn around the power sector.

He clarified that Maharashtra was not being given weightage out of turn because he was from that State. The Centre was keen that each State should be equipped to provide power to its people. Money would not be a constraint in developing rural electrification, he added.

By 2009, all the villages in India would be electrified and by 2012 each home would have electricity, Mr. Shinde promised. He said he was interested in capacity addition in Maharashtra. The State is grappling with an ailing power sector, with no capacity addition in the last 10 years. Since the State Electricity Board was reorganised into three separate utilities and a holding company in June 2005, things have become more streamlined. The financial assistance by REC will be provided in the next three years for commencing new projects. These will generate additional power and strengthen power transmission and distribution networks.

Anil Kumar Lakhina, chairperson and managing director, REC, said that as per the master plan prepared by Maharashtra, it would require Rs. 25,000 crore to turn around the power sector. The State had prepared a detailed micro plan for the purpose and the REC was impressed with the State's track record in utilising funds that had been given earlier, he pointed out.

Bhusawal thermal project

The REC has sanctioned financial assistance of Rs. 3,693 crore for the Bhusawal expansion thermal
power project in Jalgaon district. Its estimated cost is Rs. 4,600 crore and it will add 1000 MW to the State's power generation capacity when it is ready.

The REC has planned financial assistance of Rs. 8,500 crore for the State power distribution company (MAHADISCOM) and of this, it has sanctioned Rs. 5,100 crore in 2006-2007 for projects which will be completed by 2008-09. These projects will lead to reduction in distribution losses in the State from the present 28 per cent to 18 per cent.

The Maharashtra State Electricity Transmission Company (MSETCL) will get Rs. 5,000 crore from the REC for improving the transmission network in the next two years.

Source: The Hindu, Mumbai
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