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G.K. Nair

KOCHI, Jan. 1

RESUMPTION of operations by the BSES plant at nearby Pathalam last Friday, after remaining closed for over a year, is expected to bring some respite to the power crisis in Kerala.

The power crisis had deepened in recent months due to deficient monsoons leading to the drying up of the reservoirs of the major hydroelectric projects, on one hand, and the closing down partially or fully the thermal/diesel power projects.

Power generation from the hydel projects has been reduced to around 10 million units per day while the KSEB's diesel power plants are being run at less than half its capacity.

This had compelled the State to draw more power from the Central grid and other sources just to meet the requirement after enforcing a 30-minute cyclical power cut at the peak hours in the evenings.

At last, following an agreement with the State Government, the BSES management has reopened its 165 MW power plant after shutting it down for over a year.

The State Government has agreed to pay Rs 9 crore for forward running of the plant under a revolving LC account.

This would help the BSES to meet the requirement of Rs 2.5 crore towards fixed charges and Rs 6.5 crore for the fuel expenses.

The State has paid the money for one-week operations.

As per this arrangement, all outstanding bills would be settled separately, Mr S.M.C. Pillai, Managing Director, BSES, told Business Line.

He added that settlement of outstanding bills had to be referred to Central Electricity Authority (CEA) by KSEB and the company would abide by the recommendations of CEA.

The plant could generate 1,100 million units per annum which was enough to cater the requirement of 80 lakh domestic consumers.

For running the plant viably, it has to be operated at full capacity, and for now, the capacity utilisation and the quantum of power generation would depend on the load despatch by KSEB.

Under an arrangement between BSES, NTPC, KSEB and the Power Ministry, 180 MW power generated by Kayamkulam thermal plant would be sold to Tamil Nadu and Karnataka and based on this, power will be evacuated from the BSES plant.

This would bring down the liability of KSEB by around Rs 300 crore per annum.

Mr Pillai also said that shutting down of the plant for over one year had inflicted heavy losses on the company.

It had to pay Rs 136 crore to the financial institutions for debt servicing alone; Rs 65 crore remains to be paid.

"Yet, they have come forward to help the company to resume its operations but on the condition that if one more default happens, it will be declared NPA. We have lost the maximum and cannot lose any more."

According to Mr Pillai, the plant is currently run on naphtha, the price of which has almost trebled in recent years, raising the cost of power generation.

The Reliance group, which holds 45 per stake in BSES, will take over the management anytime as it is planning to raise its equity to around 70 per cent by early 2003.

On the other hand, the group is planning to bring gas through its own pipeline from the Krishna Godavari basin to Kerala, which would help the BSES plant generate power at a lower cost in the future.

The BSES thermal power plant was set up at the behest of the State Government in 1995 at a cost of Rs 620 crore.

BSES has invested Rs 110 crore in it, while Kerala State Industrial Development Corporation (KSIDC) has invested Rs 17.48 crore.

The rest of the investment was made through borrowings from Canara Bank, Punjab National Bank, Andhra Bank, Vysya Bank, Indian Overseas Bank, Stanchart, IDFC and Power Finance Corporation.

Reopening of the BSES plant has become inevitable given the Global Investors' Meet (GIM) scheduled to be held this month, industry sources said.

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