| Gail chairman Proshanto Banerjee in New Delhi on Thursday. Picture by Rajesh Kumar
New Delhi, June 23: The special purpose vehicle (SPV) to revive the Dabhol power plant will be formed within 10 days and generation could begin in the first half of 2006.
This was disclosed today by Gail chairman Proshanto Banerjee, whose company will be one of the partners in the firm, along with NTPC and financial institutions.
Cost estimates for supply of power at Rs 2.30 per kwh from the mothballed project have already been worked out. However, the financial mess and claims of GE and Bechtel will have to be sorted out before the firm meant to revive the project can step in.
Banerjee said the process laid down by the debt recovery tribunal would have to be followed for the acquisition and the SPV may have to put in a competitive bid for acquiring the plant’s assets. These would have to be offered at “fair value” and the project itself must appear economically viable.
The Maharashtra State Electricity Board (MSEB) will hold a 15 per cent stake in the plant. The rest will be shared equally among Gail, NTPC and an IDBI-led consortium of financial institutions, giving each 28 per cent.
While Gail is expected to take care of sourcing liquefied natural gas (LNG) for the project and setting up an import terminal, NTPC will be running the plant.
The pipeline major is confident of arranging the supply of LNG by mid-2006, when generation is expected to begin. The planned LNG terminal will have a capacity of five million tonnes ' enough to generate up to 5,000 MW.
A team of Gail and NTPC officials have already inspected the idle plant and found it in good shape.
A solution to break the logjam over the 2,184-MW project had been elusive for long even as Maharashtra, whose industries would have benefited from it, reels under an energy crisis.
Signs of a headway in DPC revival talks came last month, when Union power minister P. M. Sayeed confirmed the Centre was close to a final solution on the issue. “We are in sight of a solution and there is no deadlock now.”
He spoke after differences between promoters GE and Bechtel, as well as with Indian financial institutions, which have a Rs 5,000-crore exposure to the project, had been resolved. GE and Bechtel hold an 85 per cent stake in the venture.
Phase I of the project will generate 740 MW. Initially, it will use naphtha as a fuel, but later switch to liquiefied natural gas. Phase II would generate 1,444 MW and use Gail’s gas.
GE, too, indicated last month it would help find ways to restart the stalled power company.
The decision followed the visit of its chairman and CEO, Jeffrey Immelt, during which he met Prime Minister Manmohan Singh and ministers of power, finance and industry. Immelt said GE’s interest lay in resolving the Dabhol tangle.
However, days later, Bechtel attached the shares of Maharashtra State Electricity Board in the project.
The action followed Dabhol Power Company’s failure to meet the May 27 deadline set by an international arbitration panel last month to pay $123 million for violation of its shareholder rights in the power venture.