The power project, the first of its kind in Goa, is scheduled to be commissioned by the end of this month. As per the PPA signed with the erstwhile Pratapsinh Rane government, Goa's Electricity Department will purchase 28 crore units of power at the rate of Rs 2.90 per unit.

On the other hand, state-owned power plants like the National Thermal Power Corporation (NTPC) supply power at the rate of Rs 1.10 per unit. However, government officials themselves admit that state-owned plants enjoy numerous advantages like depreciated plant and machinery, which result in lower costs.

Purchasing power from the Reliance-Salgaonkar power company is likely to further affect the slender finances of the Goa State Electricity Department. From a small operatingsurplus of a little over Rs 5 crore per month at present, the department will suffer monthly losses of Rs 2 crore as it has to shell out Rs 7 crore every month to Reliance-Salgaonkar. State government officials are now hoping to renegotiate the PPA with the Reliance-Salgaonkar group in order to reduce this outgo.

Incidentally, the International Finance Corporation has recommended privatisation of transmission and distribution (T&D) of power supply as a solution to tightening government finances. However, the central and state governments are yet to decide on the modalities, which has put the scheme in cold storage.

Though the previous government had privatised T&D in toto, a section of industry and financial institutions favour the setting up of an independent T&D authority to sell the power generated by private producers.