Bechtel glitch may delay DPC

NDTV PROFIT EXCLUSIVE

The chances of the 2,100 mw Dabhol project, now rechristened Ratnagiri Gas and Power, starting operations by May 1, have receded.

Crucial subsystems like turbines, regassification plants and water channels have to be linked to the main plants before they can produce electricity but American contractor Bechtel which was supposed to do all that, has put a gun to the government's head making big demands before starting the plant.

Bechtel wants a consultancy fee of Rs 140 cr as well as a $6 million success fee if the project takes off smoothly. This translates to roughly Rs 165 cr, or a staggering 19% of the budgeted start-up cost of Rs 870 cr. RGPPL has termed this demand as excessive.

Bechtel also wants that RGPPL should not be allowed to take any loan or tie up any technical collaborator on the strength of Bechtel's association with the project.

NDTV has learnt that Bechtel only wants to deal with BHEL and not with RGPPL. But if Bechtel incurs any loss while dealing with BHEL, RGPPL has to pay to Bechtel.

Sources in the ministry of power have told NDTV that the conditions put forward by Bechtel are both tough and excessive and that if indeed these conditions are to be met then there is no way that the May 1 deadline as desired by the power minister for the revival of the erstwhile Dabhol Power project can be met.

Bechtel says its demands are far from excessive and have been put in to protect its own interests in the RGPPL project.

But with the May 1 deadline fast approaching RGPPL has put in place a crack team of engineers from BHEL and NTPC to ensure that all 23 subsystems are linked to the generating units.

Now the RGPPL Board and even the power ministry may have to intervene. And sources in BHEL have told NDTV that if a team of NTPC and BHEL can complete the critical linkages by May 1, Bechtel may have to exit altogether.