Gail seeks guarantee on Dabhol

Gail (India) Ltd, which is scouting for long-term gas supply contracts in order to service the Dabhol power plant, is demanding certain guarantees from the government.

The company has said it wants the new purchaser, which will buy the plant after it is restarted, to take over the sale purchase agreement and enter into a regasification service agreement with it for gas not used by the power plant.

"Long-term suppliers will want someone to stand guarantee for the payments. The project SPV, consisting of National Thermal Power Corporation and Gail, which will be working on reviving the plant, does not have a balance sheet and, therefore, cannot stand guarantee for the deal," said an official.