Oil min to move EGoM on revival of Ratnagiri
To save the Ratnagiri Gas Power Project, from being declared a non-performing asset, the oil ministry has been asked to move a note to the EGoM for immediate allocation of domestic natural gas to the project.business Updated: Mar 17, 2014 00:49 IST
To save the beleaguered 2,000-MW Ratnagiri Gas Power Project (RGPPL), the erstwhile Dabhol power project, in Maharashtra from being declared a non-performing asset (NPA), the ministry of petroleum has been asked to move a note to the Empowered Group of Ministers (EGoM) for immediate allocation of domestic natural gas to the project.
HT has done a series of stories on warnings by project promoters like GAIL and NTPC and lenders including SBI, ICICI and IDBI that any further delay in financial support or allocation of domestic gas could irreversibly impact the viability of the project. These reports had pointed out that the company would again have to approach the government for a bailout package which may involve fresh round of funding from public sector companies, banks and financial institutions.
"The petroleum ministry will move a note urgently seeking the directions of EGoM on gas allocation and implementation of priority to RGPPL along with fertiliser units according to its original decision to facilitate about 3.3 million standard cubic meters of gas per day (mmscmd) from the KG-D6 fields," say the minutes of the March 3 inter-ministerial meeting chaired by economic affairs secretary Arvind Mayaram, a copy of which is available with HT.
"The power ministry will recommend immediate allocation of the balance 4.2 mmscmd of gas for RGPPL from the additional quantity of 5.5 MMSCMD of domestic gas available for the power sector," the minutes add.
State-run banks, financial institutions and public sector units including NTPC and GAIL that have together invested Rs 8,500 crore in reviving the project, have been issuing continuous warnings over the past few months that immediate efforts were needed to save the project from being declared an NPA.
Gas supply from the KG-D6 fields to the project has been stopped since March 1, 2013 in spite of it being accorded priority status along with fertiliser units for allocation of gas from the fields in 2008 by the EGoM. The EGoM had allocated 7.6 mmscmd of KG-D6 gas to RGPPL.
With no gas supplies to the project since March 2013, the company has not been able to meet its debt servicing obligations of Rs 1,274 crore for 2013-14 and is currently facing a "cash-out" situation. Non-recovery of dues from Maharashtra distribution company MSEDL — the major beneficiary of power produced by the project has also contributed to the financial mess.
MSEDCL owes Rs 1,060 crore RGPPL up to November 2013.
"We (NTPC and GAIL) request your kind help in the matter as the company (RGPPL) is facing severe financial crisis due to non-availability of domestic gas and non-payment of fixed cost by MSEDCL since April 2013," RGPPL wrote to the power ministry on February 27.