The power ministry may refer the issue of gas allocation for Ratnagiri Gas and Power (RGPPL), formerly the Dabhol Power Company, to the Cabinet Committee on Investment to fast-track the process and prevent lenders’ exposure of R8,500 in the project from turning into a non-performing asset.
A source said while an EGoM on March 28 has approved priority gas allocation (along with the fertiliser sector) to the project, the 1,967-MW plant is non-operational since August 1, 2013. “Involvement of a high-level body to resolve the issue quickly may prevent the project from getting bust,” the source said.
The power ministry has already raised the issue of gas allocation for RGPPL with the oil ministry that is understood to have expressed its inability to give additional gas allocation to the project. Considering the seriousness of the issue, an EGoM meting could also be convened.
Faced with a low outputfrom RIL’s KG-D6 block, the EGoM on August 23 capped gas supply to fertiliser units at 31.5 mmscmd and allowed all additional gas available beyond this upto 2015-16 to the power sector. But this exercise would leave only 1.125 mmscmd of gas for power in 2013-14, 3.980 mmscmd in 2014-15 and 6.895 mmscmd in 2015-16, leaving little for priority allocation for RGPPL.
“...the company is finding it difficult to meet its debt service obligations to lenders who have large exposure in RGPPL of about R8,500 crore,” ICICI bank managing director and CEO wrote to power minister Jyotiraditya Scindia flagging off the issue.
“Immediate supply of at least 2.5-3.0 mmscmd to RGPPL from APM sources as an interim measure is needed in order to bring parity with other gas based power plants which are currently operating at around 25-30% PLF. This would ensure that company is able to meet its debt service obligations without default,” she said.
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