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Ratnagiri revival held up in tussle

A Group of ministers will be meeting on March 4 for a solution to get the power project up and running, reports Samiran Saha.

business Updated: Feb 22, 2008 02:23 IST
Samiran Saha

The Empowered Group of Ministers (EGoM) is slated to meet on March 4 to discuss the festering issue of the Ratnagiri Gas and Power Private Limited that is yet to achieve its optimum generation capacity despite fund infusions from time to time.

The promoters — GAIL (India), NTPC and Maharashtra State Electricity Board Holding Co (MSEB) — together have infused additional funds to the tune of Rs 1,200 crore. Despite this infusion, the company has a deficit of around Rs 1,500 crore.

According to power ministry sources the meeting of the EGoM assumes significance as the group would try to figure out ways to get the project running at its optimum capacity. The MSEB, which has a 10 per cent stake, has informed the power ministry that the plant is not being run on optimum capacity as redundant machinery was being upgraded.

The power ministry has asked the petroleum ministry to divert unused re-gasified liquefied natural gas (RLNG) of Ratnagiri Gas and Power to other power projects as the allocated amount of gas was lying unutilised due to restoration work in one of its, gas turbine that has been shut down recently for repairs.

The plant’s RLNG requirement of the project has reduced from 5.4 million standard cubic metre per day (mmscmd) to 4.2 mmscmd as the turbine is shut for maintenance.

Earlier, the finance ministry, in a scathing letter to the power ministry, called for immediate steps to end cost and time overruns in the much delayed Dabhol power project, now rechristened Ratnagiri Gas and Power Private Limited.

The project cost was originally estimated at Rs 10,038 crore. “You would kindly appreciate that the commitments made by the lenders to absorb increase in completion cost cannot be indefinite and open ended. Further, lenders cannot be held responsible for any delay in the interest of the project and all stake holders, it is imperative that the costs are frozen...” a senior finance ministry official said in a letter.