RGPPL Start Supplying 500 MW Power To Indian Railways

RGPPL Start Supplying 500 MW Power To Indian Railways

Team EnergyInfraPost

Ratnagiri Gas and Power Projects Ltd (RGPPL) (or the erstwhile Dabhol Power Project) in Maharashtra has started supply 500 mw power to Railways, thanks to an agreement it signed recently with Railways for supply of 500 MW power to Railways at fixed price for five years starting from midnight of 31st March.

“At the stroke of midnight hour, Ratnagiri gas power plant will breathe a new life with initiation of power purchase agreement with Railways,” union minister of state for power, RE, coal and mines, Piyush Goyal tweeted.

Sitting on a total Debt of approximately Rs. 8906 crore, RGPPL has started generation of power under the scheme of Utilization of gas based power generation capacity for the year 2015-16 and 2016-17.

Union Minister of State (IC) for Power, Coal & New and Renewable Energy and Mines, Piyush Goyal had told the Lok Sabha last week that the government of Maharashtra has agreed, in principle, for granting waiver of State transmission charges and transmission losses and also waiver of VAT on gas purchase by RGPPL.

All these initiatives have provided a new lease of life to this beleaguered gas based power project of RGPPL.

The Ministry of power has assured that all arrangements for supply of 500 MW power to Railways are in place. This includes the Gas Supply Agreement (GSA) with GAIL for supply of gas at a fixed price for five years; PPA average 500 MW of power ( Not less than 485MW at any point in time) with Railways in five states including MTA/STA and NOC for flow of power to the various points.

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Railways and RGPPL has signed an agreement for supply of 500MW of power to Railways at fixed price for five years starting from midnight of 31st March.

This is win-win arrangement for both, Railways will get assured supply of power at a fixed and firm price for next five years free from any risk of rise in fuel price etc and it will also ensure the sustained operation of RGPPL power plant and service its debt.

The scheme also envisages demerger of power plant and LNG terminal into two separate companies. All the stakeholders have approved the scheme.

GAIL will supply the LNG to the plant at a fixed price for five years. This will also ensure construction of brake water facility for expansion of capacity of LNG terminal.

Government has taken following steps for revival of RGPPL:

(i)     Decided to demerge the Power Block and Liquefied Natural Gas (LNG) terminal into two separate entities.

(ii)     Banks/Financial Institutions have agreed to restructure the debt.

(iii)    Gas supply to RGPPL at a firm price for the five year period has been agreed by GAIL


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