However, its revenues have slipped sharply to $285 million, against the target of $320 million, mainly due to unusual rise in international fuel prices and low withdrawal of power by MSEB.

The DPC, which had earned a profit of Rs 199 crore ($45.6 million) and a revenue of Rs 154 crore during May 1999 - March 2000, has estimated a cost escalation of $150 million during the completion of Dabhol phase-II (1,444 mw) by year end. The cost esclation would be 10 per cent of the total phase-II cost of $1.98 billion.

The DPC had incurred a cost overrun of $75 million during the completion of Dabhol phase-I (740 mw). According to DPC sources, its profit, which was an accrual on accounting basis and not in cash form, had risen following installation of GE 9 F technology and operational efficiency.

Enron India managing director K Wade Cline, in an exclusive chat, told The Financial Express that the company could not meet the revenue target of $320 million due to external factors. In addition to this, the company had to bear the burden of certain costs which were not pass-through.

Mr Cline said that MSEB's low dispatches is a matter of concern, as the company had made its estimations related to profit and revenue based on it.

"MSEB's power purchase bills which were ranging between Rs 170 crore and Rs 190 crore have declined to Rs 127 crore for January this year mainly due to low drawal from the DPC," he added. According to Mr Cline, had MSEB drawn power at 90 per cent capacity, the DPC's average tariff during May 1999-December 2000 would have been Rs 4.08 per kWh. However, in view of the low dispatch, it to came around Rs 5.08 per kWh.

Mr Cline attributed the hike in tariff mainly to the 9 per cent increase in the rupee dollar rate and 95 per cent rise in naphtha prices. DPC's December 2000 tariff (corrected to 90 per cent dispatch) was Rs 4.83 per kWh as compared to Rs 3.09 per kWh in May 1999. "Of the total difference of Rs 1.74 per kWh, the increase of 34 paise per kWh (19 per cent) was due to the rupee-dollar rate and Rs 1.40 per kWh was a result of naphtha prices.

Mr Cline hoped that the tariff after Dabhol phase-II completion (in 2002 at current rupee dollar rates with liquified natural gas as fuel) ranges from Rs 3.34 to Rs 3.67 per kWh. This would be largely dependent on the crude oil prices ($22-28 per Bbl).

"The tariff responds to changes in macro-economic factors and MSEB dispatch," Mr Cline said. He explained that the DPC tariff comprises capacity charge plus energy charge. Under the capacity charge, DPC guarantees a 90 per cent target availability and penalty for shortfall in target availability. These charges are largely influenced by rupee-dollar rates and inflation.

As far as energy charge is concerned, it is paid on the basis of dispatch from MSEB and influenced by fuel prices and import duty on fuel.

Mr Cline said that the DPC, which has so far spent $1.5 billion on Dabhol phase-II, is yet to incur $500 million for its completion. The company had spent nearly $1.1 billion on the completion of phase-I.

Mr Cline said that the DPC had projected a total project cost of $950 million, based on a 70:30 debt equity ratio. However, the cost increased by $150 million after Dabhol phase-I was repudiated in August 1995. Mr Cline said that the DPC completed Phase-I based on 60:40 debt equity ratio by incurring an expenditure of $1.16 billion, comprising $650 million debt and $450 million equity.

Regarding phase-II, the DPC has restructured the debt-equity ratio at 75 ($1.45 billion):25 ($454 million) with the total cost estimated at $1.9 billion.

Mr Cline hoped that the DPC's revenue would increase in the year 2001, if MSEB increases its drawal and pay up all its arrears.