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Govt may ask NTPC to get Dabhol going

Sidhartha & Anil Sasi

Under pressure from the Prime Minister's Office to resume generation at the 2,184 mw Dabhol Power Company plant, the power ministry and financial institutions are likely to ask the National Thermal Power Corporation to commence production from the first phase of the project and complete the construction of the second on a "commercial basis".

Brajesh Mishra, principal secretary to the Prime Minister, has convened a meeting on Wednesday to explore ways of restarting the idle plant.

The power ministry, which had so far opposed NTPC's involvement in the project, has softened its stance.

"The power ministry is against NTPC investing in the project or ensuring offtake of power but is willing to let it restart the first phase of the project and complete the second on contract (as an EPC contract)," a senior government official said.

"NTPC can complete the project in about a year's time. By then, the facility can be handed over to the identified buyer or operator," he added.

However, since the Bombay high court had appointed a receiver, its permission would be required before an operator was finalised, sources added. They admitted that the Indian lenders, led by the Industrial Development Bank of India, had not made much progress in arranging a buyer for the project though seven bids had been received. The lenders have not yet finalised the sale model for Dabhol Power and have appointed Rothschild of the UK to finalise the modalities for an asset sale instead of the earlier proposed equity sale.

The meeting convened by Mishra will be attended by power secretary R V Shahi, economic affairs secretary C M Vasudev, IDBI chairman and managing director P P Vora, ICICI Bank chairman and CEO K V Kamath and senior officials from the Maharashtra government and the Maharashtra State Electricity Board, which has a 15 per cent stake in Dabhol Power.

The meeting is also expected to take up the issue of bringing down tariffs to the Rs 2.50-3 band and the purchase of power from the first phase of Dabhol Power by Maharashtra. It will also decide on the operator for the second phase.

The Maharashtra government had earlier agreed to the offtake of the entire 1,440 mw at Rs 2.50-2.80 per unit but had sought time to decide on the purchase of power from the second phase.

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