Standard Post with Image

Revival of Dabhol Power Project Through Railways: A Win-Win Situation For Both

News:

The Indian Railways plans to buy electricity from the Dabhol plant, offering a lifeline to the 1,967 megawatt (MW) power project now owned by Ratnagiri Gas and Power Pvt. Ltd. The national transporter will, in turn, benefit from lower tariffs.

Source:- live mint

SNP insight:

Railways are trying to slash their power tariffs by procuring power from Dabhol Plant. This proposal will help to revive the power plant to a great extent as it is on the verge of collaspe due to high debt and shortage of gas. Further, railways will be able to procure power @ Rs.4.7/Unit therefore bringing down their average cost of procurement from Rs.7/Unit to around Rs.5/Unit. This tariff reduction may be reflected on the passenger and freight tariff of railways ultimately benefitting consumers.  

Source:- SNP Infra Research