The Hindu Business Line : GoM clears proposal to restart Dabhol &151 Note for Cabinet approval soon

AN empowered Group of Ministers looking into the restart of the $2.9-billion Dabhol power project on Saturday cleared a Cabinet note entailing the settlement package, including payments to be made to the majority equity holders, GE and Bechtel, and overseas lenders of the project. The note would be placed before the Union Cabinet for approval shortly.

According to Government sources, a special purpose vehicle (SPV) formed by NTPC and GAIL (India) Ltd for restarting the project will have the first right to equity. The SPV, registered as Ratnagiri Gas and Power Pvt Ltd, has been assured a 14 per cent return on equity and would be paid operations and maintenance charges by the Indian lenders at a rate of Rs 8.44 lakh per MW a year.

Deal with Bechtel?

Indian lenders to the Dabhol Power Plant are said to be close to clinching a settlement with Bechtel Corporation and a high-level team is negotiating with that company's representatives in London. A settlement with Bechtel Corporation would pave the way for reviving the 2,184-MW plant, shut down since 2001.

The Indian lenders to the project, led by IDBI and SBI, have already reached an agreement with GE to settle its equity claims and other dues at $145 million. They have also reached an agreement with the foreign institutions that have an exposure in the project, as well as with the Overseas Private Investment Corporation of the US, official sources said.

An agreement with Bechtel is expected to be through before the July 18 hearing at the London Council for Arbitration, where GE and Bechtel have filed claims against the Centre for breach of investment protection pacts and appropriation of assets.

After settlement of the dues of the overseas lenders and the claims of GE and Bechtel, the Dabhol plant would be run by NTPC and GAIL. The Government is planning to restart the plant by June next year. Engineers from GE and NTPC have begun inspecting the plant, which was shut down following payment disputes with the project's sole customer — the Maharashtra State Electricity Board.

NTPC, GAIL and the IDBI-led lenders will chip in with Rs 500 crore equity each in Ratnagiri Gas and Power, which will own and operate the Dabhol assets. GAIL will source the LNG required to run the power plant, while NTPC will operate the plant and negotiate the power purchase agreement with MSEB.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
VAT States post 15-pc growth in revenues in June: Asim Dasgupta

`Synergy in energy' panel may offer 2-3 options for oil PSUs' merger

GoM clears proposal to restart Dabhol &151 Note for Cabinet approval soon

2,154 mt of coal reserves found in '04

Left to meet Sonia to end impasse on BHEL disinvestment
Says no change in stand