The Hindu Business Line : Domestic lenders may buy GE-Bechtel stake in Dabhol

DOMESTIC lenders to the beleaguered $2.9-billion Dabhol Power project are likely to buy out GE and Bechtel's 85 per cent stake in the project at around $300-350 million, paving the way for restarting the project, institutional sources involved in the exercise said. The domestic lenders, led by IDBI and SBI, have already persuaded foreign lenders to the project to sell their entire debt component to them.

Gas and Power Investment Company (GAPIC), a special purpose vehicle set up by the Indian lenders to the project, is in advanced stages of buying out the project's foreign debt component of around $600 million. The recently formed company, in which IDBI and State Bank of India have a stake, would raise money by issuing bonds to pay off the project's offshore lenders, official sources said. The Maharashtra Government has also expressed its willingness to purchase power from the project at Rs 2.20 per unit.

A meeting of the Empowered Group of Ministers (E-GoM) looking into the restarting of the Dabhol project, which was slated for Thursday, was however cancelled.

According to plans firmed up by the domestic lenders, NTPC and GAIL would operationalise the project as soon as the equity stake sale is concluded by the domestic lenders. Both NTPC and GAIL are also likely to pick up stake in the project at a later date, official sources involved in the exercise said.

Speaking on the progress made so far, the Power Minister, Mr P.M. Sayeed, told Business Line, "Restarting the project at the earliest is our first priority. The Group of Ministers, which is looking into the modalities of restarting the project, has made significant progress. It would not be proper to talk about the details, but all I can say is that the end is in sight."

The Dabhol plant has been shut since May 2001 after a payment dispute with the Maharashtra State Electricity Board, the project's sole customer. Dabhol was generating 744 MW of power when it was shut down. Work is nearly complete on a 1,444-MW expansion project and a 2.5 million tonne per annum liquefied natural gas import terminal.

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