The Prime Minister's Office has asked the Indian lenders of Dabhol Power Company to lower interest rates on loans extended to the 2,184 mw project in order to make power tariffs reasonable. The lenders have also been asked to negotiate with the Maharashtra State Electricity Board (MSEB) to evacuate power from the first phase of the plant.
Government officials said a meeting, convened by Brajesh Mishra, principal secretary to the Prime Minister, had decided to rope in National Thermal Power Corporation to restart phase I of the facility on a contractual basis.
Sources also said the Indian lenders, led by Industrial Development Bank of India, had been asked to make necessary arrangements to restart the first phase of the project, including addressing issues like fuel supply.
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"The lenders have been asked to lower interest rates on the Rs 6,000 crore debt to Dabhol Power Company to reduce the cost of power to reasonable levels," said an official.
The average rate of interest on loans is around 14.5 per cent. Maharashtra State Electricity Board had earlier said it would consider evacuating power from phase I of the plant if tariffs were reduced to Rs 2.50-Rs 3 per unit.
While the government and Indian banks and financial institutions had veered towards the asset sale model for Dabhol Power Company, sources said, Overseas Private Investment Corporation of the US was of the view that sale of equity was the best option to realise maximum value for the investments made by Enron, GE and Bechtel, which held 85 per cent stake in the power generation company.
Sources, however, said permission would be required from the Bombay High Court before finalising the operator since the court had appointed a receiver.
The lenders have appointed Rothschild of the UK to rework and finalise the modalities for the asset sale strategy of the project, instead of the equity sale model proposed earlier.