MSEB has further asked BSES to pay charges for 275 MVA additional standby demand at the rate it (MSEB) would charge to TEC from March 1, 1999. The current rate is Rs 550 per KVA/M applicable till July 31 and it would be revised to Rs 600/KVA/M from August 1.

MSEB in its recent communication to BSES has made it amply clear that its clearance under section 44 of the Electricity (Supply) Act, 1948 for the proposed 495 mw Saphale project in Thane district would be based on fulfillment of these conditions. MSEB's tough posture deserves special significance especially when the state government and TEC have been pressing for the payment of the relevant standby charges by BSES to TEC.

MSEB sources told The Financial Express that BSES would have to enter into a tripartite agreement between MSEB, BSES and TEC for payment of standby charges for the standby quantity determined from time to time. The state government would carry out suitable modifications in licence issued to BSES incorporating the principles of the commercial arrangement.

TEC had been taking strong objection for clearance under section 44 to BSES as it would strongly hamper its revenue projections in Greater Mumbai. TEC and MSEB have clearly said that BSES should commission its proposed project with a gap of one year "taking into account future demand in the licensed area."

"The board's consent is without prejudice to MSEB's rights to take over BSES undertaking in pursuance of option of purchase vested in the board under section 6 of the Indian Electricity Act, 1910 and in terms of Bomaby Suburban Electric Licence 1926 as amended from time to time," MSEB sources said.

BSES would have to make its own arrangement for evacuation of power generated from Saphale project and supply for the consumers only within its area of licence. "MSEB does not undertake to purchase any power from BSES or to wheel the same," the sources added.

BSES would have to make necessary arrangements to furnish real time data in respect of Saphale power station to chief load despatch, MSEB Kalwa and load despatch centre of TEC for integrated control of the state grid.

As far as naphtha or gas is concerned, it would be the responsibility of BSES to obtain the fuel linkage. MSEB has made it clear that it would not recommend BSES application for fuel linkage to either state or central governments. "You will also not be allowed to have any fuel linkage from the quota allotted to the state government by the Centre," MSEB sources said.

MSEB has asked BSES to acquire necessary clearances from the directorate of industries, Maharashtra Pollution Control Board (MPCB) and state environment department before proceeding further in establishing generating stations. "The conditions as may be prescribed by the state government from time to time shall be strictly adhered to by BSES," MSEB said.

MSEB has said that the present commercial arrangement between MSEB and TEC, TEC and BSES would not be disturbed and would continue in future even after commissioning of Saphale project. BSES would have to sell the entire power generated in its licence area.