NTPC not interested in Dabhol equity

Power generation major, National Thermal Power Corporation (NTPC) is not too keen on taking over the assets of the long-stalled Dabhol Power Company (DPC) and is taking a fresh look at the proposal.

The idea of shelling out Rs 500 crore in conjunction with GAIL did not find favour with executives of NTPC.

This might lead to a delay in restarting the project by June and making the power plant operational by September 2006 as envisaged by the panel headed by the cabinet secretary.

Highly placed officials at NTPC said, "We are not too keen on taking over the assets or an equity stake in the new company. If offered, we would like to run the plant on a management fee basis, where our expertise lies. NTPC is not a fund management or debt management company and taking over the entire company even if it is with anyone else would tell on the financial health of NTPC."

NTPC is taking a fresh look at the issue and is renegotiating with the government for allowing it to run the plant on a management fee basis, said sources close to the development.

The Dabhol project was mothballed in 2001 after the Maharashtra State Electricity Board refused to pay its dues to Dabhol for power purchases. Since then, the matter has been referred to the courts. Now the government is bent upon settling the issues fast.

According to the revival plan prepared by the panel headed by the cabinet secretary, a new company or a special purpose vehicle would be floated, to take care of the outstanding debt and complete the project, in which NTPC, GAIL and Indian lenders would put in Rs 500 crore each to raise Rs 1,500 crore equity.