Four years after the revival of the Dabhol power project in Maharashtra, the government seems to have made a major headway in solving the turbine imbroglio surrounding the ill-fated project.

At a meeting convened by Power Secretary VS Sampath later this evening with a team of officials from General Electric, the US-based company, which has supplied six gas turbines at Dabhol, has agreed to start negotiations on the Contractual Service Agreement of the project, according to official sources.

"They (GE) have understood our viewpoint and have agreed to discuss the terms and conditions of the CSA," said a senior government official close to the development.

According to the CSA, expected to be signed between GE and Ratnagiri Gas and Power Project Ltd, GE would ensure 85-90 per cent of machine availability of the turbines were installed at Dabhol, at a negotiated price, the official said.

It was also decided at the meeting that GE would send an empowered team to India next week, to look into the matter in detail, he added.

The Dabhol power plant has three blocks with six gas turbines. However, only three turbines are functioning at present, due to which power generation from the plant has come down to 300-600 Mw against the capacity of over 2,000 Mw, according to the official.

The project, originally called Dabhol Power Co, was renamed RGPPL after it was taken over by a combine of public sector banks, the Maharashtra government, GAIL India Ltd [Get Quote], NTPC Ltd [Get Quote] and financial institutions. There have been six major turbine failures since the revival of the project in 2005.

At the beginning of the current financial year, RGPPL had planned to generate about 10,000 million units power. However, frequent tripping of GE-supplied turbines forced it to scale down its projections by more than half.