The Hindu Business Line : Dabhol lenders reach accord with GE, Bechtel

THE long-drawn battle over the Dabhol power plant in Maharashtra is over, with the lenders to the project reaching a settlement with 85 per cent equity holders GE and Bechtel.

A joint venture special purpose vehicle - formed by NTPC, GAIL, MSEB and the financial institutions - is expected to file application for registration by the end of this week and an integrated company would be formed with a CEO. The 2,184 MW utility would be further expanded by 2,500 MW at the same location and the overall capacity of the station would go up to 5,000 MW, sources said.

The SPV would own, operate and maintain the plant and expand its capacity. In the light of the power shortage in Maharashtra, the State Government has agreed to lift the entire 5,000 MW from the plant.

GE executives, along with NTPC, GAIL and BHEL officials, who conducted an inspection of the plant, have submitted a report to the Government stating that the plant was in "good shape" and that after opening of the stations, it would not take more than six to eight months to operationalise it. Even though, GE and Bechtel's settlement details are not being disclosed, sources said the financial engineering has been done in such a manner that the tariff from the plant would be around Rs 2.30 per unit, and in any case not exceed Rs 2.50 per unit. The supply of fuel to the LNG plant is targeted to be achieved by July 2006, when both phases would be made operational.

While MSEB would hold a 15 per cent stake in the joint venture SPV, the balance 85 per cent would be equally shared by NTPC, GAIL and the financial institutions led by IDBI. Other financial institutions such as SBI, ICICI, Canara Bank and Punjab National Bank are among the major lenders.

According to sources, the venture, which would be registered in the next couple of weeks, would be an integrated company taking care of both the phases of the plant, as also the LNG terminal block. The composite board of the company would take care of both responsibilities and NTPC workers will handle the power station operations, while GAIL staff would look after the LNG terminal. Both these groups would be accountable to the CEO. According to sources, officials from GAIL and NTPC have already been identified for running the plant and they have started work on their assigned responsibilities.

The LNG terminal would have a potential of five million tonnes and would, therefore, be able to take care of almost 5,000 MW of capacity.

The ownership of the SPV would be totally within the purview of the board of the joint venture company. The company would not be privatised.

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