Economy

Help prevent loan to Ratnagiri from turning bad, SBI urges Power Ministry

| | Updated on: Dec 16, 2013

Asks Ministry to convince Maharashtra power distributor to clear pending dues

State Bank of India has urged the Power Ministry to help prevent its loan to Ratnagiri Gas and Power Pvt Ltd , the erstwhile Dabhol project, from turning into a non performing asset .

The bank wants the Ministry to ask the Maharashtra State Electricity Distribution Company Ltd to clear pending dues so that Ratnagiri Gas can meet its re-payment commitments. The gas-based power plant has been hit due to lack of fuel availability.

Ratnagiri Gas , owned by NTPC, GAIL, MSEB Holding and other financial institutions, has not been able to service its interest payouts for August, September and October and the instalment for the quarter ending September 30. The account is on verge of becoming an NPA if interest payments for August are not serviced by November 29, SBI had informed the Power Ministry last month.

The public sector bank has loaned Rs 1,752 crore to the power producer, and the loan was re-structured in 2009 due to delay in the implementation of the project.

Gas shortage Against the requirement of 8.5 million standard cubic metres per day of gas, there has been no supply for the past four months. Even the supply of 0.9 mscmd from GAIL (as and when gas is available) has been insufficient to run even one of of its six turbines at minimum operating parameters.

In addition, the Maharashtra power distributor has the option of refusing to accept the electricity generated, in case Ratnagiri Gas uses expensive imported gas. The distributor has also said the fixed cost component (of around Rs 1,950 crore) for the current year will not be paid unless it gets the benefit of ‘affordable’ power (generated using domestic gas). Further, pending dues of Rs 893.39 crore from the State power utility has strained Ratnagiri Gas’ liquidity situation.

> siddhartha.s@thehindu.co.in

Published on December 16, 2013

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