The Telegraph
Since 1st March, 1999
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CESC sets Mulajore closure date

Calcutta, Nov. 23: R. P. Goenka flagship CESC Limited has decided to close down its 60-year old Mulajore generating station by December 2003.

“We had been planning to close down Mulajore for quite sometime. Now a decision has been taken at the board level to close down the plant by December next year,” CESC managing director Sumantra Banerjee told The Telegraph.

The countdown for the closure has already been initiated. The company has started redeploying the employees of Mulajore. Nearly 300 employees have been re-deployed and the remaining 600 odd employees will be offered a voluntary retirement scheme.

“We are currently working out the modalities of the voluntary retirement scheme,” Banerjee said. Sources said that negotiation has also been initiated with the trade unions, Citu and Intuc for a smooth closure of the unit.

The company has, however, not yet taken a decision on the New Cossipore generating station that is also in vintage condition. This unit employs about 1,113 people.

The West Bengal Electricity Regulatory Commission (WBERC) had asked the company to close down both units since the cost of generation of the plants are higher than its other generating units like Titagarh, Southern Generating Station and Budge Budge.

The Goenkas had taken an in-principle decision to shut down Mulajore in consultation with McKinsey as the unit is considered high cost, unreliable in terms of power availability and a highly polluting unit.

For instance the variable cost at Mulajore is a hefty Rs 2.40 per unit compared with Re 1 per unit at CESC’s Budge Budge and southern generating stations.

Mulajore has a capacity to produce 60 MW of power. “In recent times we are drawing only 25-30 MW from Mulajore. If it is closed down then we will either increase our existing capacity or buy that amount from the West Bengal State Electricity Board,” Banerjee said.

However, the closure depends on how fast the company is able to lay the Titagarh-Mulajore transmission link so that consumers there can get directly power from the CESC grid. At present, they get power from the Mulajore generating station.

“We hope that the transmission link will be established by June-July next year,” Banerjee said.

Meanwhile, West Bengal Electricity Regulatory Commission has sharply scaled down CESC’s average cost of supply for financial years 2000-01 and 2001-02 to Rs 3.81 per unit and Rs 3.90 per unit respectively from Rs 3.96 per unit and Rs 4 per unit levels approved by the Calcutta High Court in May.

“We are currently collecting revenue on the basis of the Calcutta High Court order. We are waiting for WBERC’s decision on how to go about with the cross-subsidisation issue. Once that is in place we will be collecting revenue as worked out by WBERC,” Banerjee said.

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