Mumbai: Ratnagiri Gas and Power Pvt Ltd, the revived Dabhol Power Project, is planning to restart generation in October. The unit will run on imported naphtha and the tariff is likely to be a little over Rs 6 per unit, power secretary R V Shahi said at a seminar in New Delhi.

The cost of power from the Dhabol plant was earlier pegged at Rs 4.25 a unit.

"The Dabhol plant will be restarted from next month. Maharashtra has said that they will require electricity from the plant," power minister Sushilkumar Shinde told reporters on the sidelines of the seminar.

In fact, the Maharashtra State Electricity Distribution Company limited (MSEDCL) has started resorting to load shedding to cover the electricity demand across Navi Mumbai.

Shinde said natural gas supplies were expected to be firmed up only in March next year and the 740 MW Phase-II of the plant would be operated on naphtha till then.

RGPPL would import naphtha through Indian Oil Corporation.

The increse in cost is due to running the plant on imported naphtha, Shahi said, adding that the company has already approached power regulator CERC for tariff approval.

RGPPL would commission the other two units -- Phase-I and Phase-III -- with a total capacity of 1,400 MW in March 2007 against the earlier schedule of December this year, to match the arrival of liquefied natural gas.

The government has granted customs duty waiver to both LNG and naphtha imports for the Dabhol power plant to make them cheaper by about 5 per cent.

The Dhabol Power Company (DPC) was perhaps the largest single FDI in India and both the Government of India and the US energy giant were responsible for the power project's problems. In fact, the dubious deal with Enron to buy power from the DPC plant in Ratnagiri in Maharashtra led to the bankruptcy of the once-profitable Maharashtra State Electricity Board (MSEB).