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Dabhol in fix over GE gear

Repeated breakdowns of GE machines have resulted in losses to the tune of $850 million to the Maharashtra government and Ratnagiri Gas and Power Project Ltd, the company running the project, according to power ministry sources.

business Updated: Jan 06, 2009 21:30 IST
Anupama Airy


, January 6

The Dabhol power project once championed by Enron has moved into a new jinx. After controversies related to its original contract, feedstock use, pricing and the subsequent bailout after founder Enron’s collapse, it is now facing equipment troubles involving machines supplied by global giant General Electric Company (GE).

Repeated breakdowns of GE machines have resulted in losses to the tune of $850 million to the Maharashtra government and Ratnagiri Gas and Power Project Ltd — the company running the project, according to power ministry sources.

“Considering repeated failures, even the insurance companies have refused to provide insurance to these machines. A crucial meeting with the GE leadership has been scheduled for sometime this month,” a senior ministry official, who asked not to be identified, told HT.

“We have asked GE to enter into a contractual service agreement for this plant. The details are being worked out,” minister of state for power Jairam Ramesh told HT.

Officials say while there have been four major machines failures after the revival of the Dabhol project. Three gas turbines and one steam turbine supplied by GE have been experiencing repeated failures since January 2007. The last failure took place in November, 2008. Two machines are yet to be restarted.

In response to an e-mail on allegations of quality shortfalls, a GE spokesperson said: “GE continues to support the Dabhol Power Plant revival project and we are committed to continue working closely with our customer to complete the revival of
the plant as quickly as possible.”

RGPPL has told the power ministry that the GE machines are not delivering rated power as envisaged at the time of restructuring in 2005. It wants Rs. 1,000 crore to ramp up to its full capacity.

“While GE is not acknowledging any generic deficiency with its gas turbines, published reports indicate that similar advanced class GE machines have experienced failures in other countries also and the problem is yet to be fully resolved,” RGPPL told the ministry in a communication in possession of HT.