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Rothschild to be consultant for DPC selloff

Anil Sasi & Sidhartha

The consortium of Indian lenders to Dabhol Power Company has decided to appoint Rothschild of UK as the consultant to chalk out a new strategy for sale of the 2,184 mega watt project.

"The consultant has been given the mandate to prescribe the new bidding route and suggest ways to restructure the project costs," a senior government official said.

The consultant would be entrusted with the mandate to lower the project cost by adopting the asset sale model instead of the earlier prescribed equity divestment scheme, officials said.

The asset sale model is expected to substantially bring down the cost of power generated at the project to acceptable levels of Rs 2.50-2.50 per unit, officials said.

IDBI chairman and managing director P P Vora confirmed the development, saying a new strategy for sale would help the institutions get more bidders.

"Seven bidders are already in the fray and they have agreed to continue in the process," Vora said.

The IDBI top brass also met power ministry officials in the evening to chalk out a strategy to break the Dabhol impasse.

Meanwhile, the Maharashtra government has asked the Centre for more time to decide on whether it would purchase power from phase-II of the project. The state government had earlier conveyed to the Centre its willingness to draw the entire generation from phase-I of the project, officials said.

The Centre is hopeful that, with the recast of project terms, the per unit cost of power can be reduced. This would largely come about by adoption of the asset sale model and also by way of concessions by stakeholders, officials said.

While Maharashtra currently faces a shortfall of around 2000 MW, Karnataka has also asked for 500 MW if tariffs come down to the Rs 2.50-Rs 2.80 per unit level.

In a recent development, Essar Power has also evinced interest in drawing around 500 MW from DPC on a long term basis to meet shortfall in supply in its distribution zones in Gujarat, officials said.

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