The Dabhol revival plan is still not out of the woods. The Empowered Group of Ministers (EGoM) has to decide tomorrow on raising Rs 1,400 crore for constructing the remaining power units and the LNG terminal as well as the price of natural gas that should be charged from the power entity. Meeting after almost a month, the EGoM has not yet found a solution to the funding as the Power Finance Corp (PFC) has refused to lend in the absence of a 25-year power purchase agreement (PPA) and gas supply agreement (GSA). Last month, the EGoM suggested that Maharashtra State Electricity Board (MSEB) provide Rs 400 crore with the balance from financial institutions, including PFC. However, sources say, the FIs are refusing to overstretch their lending and PFC wants PPA and GSA in place before considering a loan. And the PPA is in doldrums because the MSEB is refusing to sign it at the current gas price, which despite being pooled, is considered very high to pass through to the consumers. The EGoM had asked that the gas price be averaged by mixing spot buy of 1.5 million tonnes from Algeria (at $8.5 per mBtu) with Petronet LNG’s Qatar import of 5 million tonnes (at $3.53 per mBtu). Gas price, ex-Petronet, is now estimated at $4.93 per million British thermal units from earlier $4.58. Pooling the gas has its own implications. As told to the EGoM, from which finance minister P Chidambaram chose to opt out, charging an extra $1.40 per mBtu from existing consumers of Qatar gas as a result of pooling would lead to an extra Rs 650 crore towards fertiliser subsidy each year. Fertiliser units consume half of the 18 million cubic metres per day of Qatari gas. It would also mean higher production cost for National Thermal Power Corp which buys about 80 per cent of the 1.6 MSCMD supplied to power producers. Indraprashta Gas Ltd, which supplies CNG in Delhi, would also have to pay the extra charge. Another issue that the EGoM has to resolve is the construction of the Dahej-Dabhol gas pipeline. The Gujarat government is not willing to allow a 15-km stretch through villages in Surat. It wants GAIL (India) Ltd to detour through a coastal area where backwater creeks and tidal movement would delay the laying of the connecting pipeline.
