Duhabi multi-fuel plant faces permanent closure

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    duhabi-multi-fuelIRATNAGAR, FEB 18 – The Duhabi multi-fuel plant at Tankisunwari, Sunsari is likely to be closed down permanently two years after it was repaired at a cost of 7.7 million euros.

    “It is not viable to operate the plant anymore,” said a source at the Nepal Electricity Authority (NEA) which owns the oil-fired electricity plant. He added that an official notice about the permanent closure would be issued soon.

    However, the chief of the plant Babu Raja Maharjan said that the multi-fuel plant could not be brought back into operation by this fiscal year, and that it had not been closed permanently. The plant has not been running since mid-March last year.

    Maharjan said that the plant should be repaired again. The plant generates around 36 MW of electricity. It had been brought back into operation two years ago after repairs but it was shut down again.

    The power plant was repaired with the financial assistance of the World Bank. The plant possesses six turbines. After repairs, all the turbines were operated for 500-1,000 hours. The plant burns furnace oil and has a high production cost.

    Maharjan said that the plant was closed due to fuel adulteration. “Adulteration in fuel had damaged the machine which forced us to shut down the plant.”

    As generating power from oil-fired plants is more expensive than from hydropower plants, the financially weak NEA had long been resisting operating the oil-fired plant. Industrialists who have been facing extended load-shedding have been expecting that the resumption of the plant would provide them a big relief.

    Industrial units in the Morang-Sunsari corridor require 90 MW of electricity. The factory owners have been demanding that the government hand over the plant to the private sector.

    The NEA had kept the plant idle for fear that it would have to sell the power generated at less than the production cost. The cost of production has been estimated to be Rs 28-30 per unit.

    Industrialists have criticized the government for not letting them operate the plant. “We have frequently asked the government to hand over the plant to the private sector, but our demand was not heeded,” said Avinash Bohara, an industrialist.

    “The plant has been closed again,” Bohara said, adding that private players could smoothly operate the plant it was handed over to them.

    Factory owners spend Rs 20-21 per unit using their generators to produce power during load-shedding hours. They pay Rs 6 per unit when there is regular supply of electricity.

    Source : The Kathmandu Post