Dabhol set to switch on by 2006

GE, Gail and NTPC to pitch in.

The 2,184-Mw Dabhol power plant could restart by the second half of 2006. A special purpose vehicle (SPV) to take over the assets of the $2.9-billion project is set to be formed in the next week or two.

Also, the agreement between Indian financial institutions and equipment supplier General Electric is expected to be finalised soon.

"We will sign a comprehensive settlement agreement with the Indian financial institutions led by IDBI. This will put an end to all disputes. I am hopeful that we can reach an agreement by the end of the month," said Scott Bayman, President and CEO, GE India, at a press conference here today.

GE Energy President and CEO John G Rice said a GE team was already working with the National Thermal Power Corporation (NTPC) and Bharat Heavy Electricals Ltd to determine the course of action for restarting the project.

"We are pleased with the progress in Dabhol," he said adding that the plant was in good shape. Bayman added GE would enter into a contract with the government to do the work on a commercial basis at Dabhol.

At another media briefing earlier, Gail Chairman and Managing Director Proshanto Banerjee indicated that the proposed SPV would be floated shortly.

"The company would be registered in one or two weeks," he said. Gail India, NTPC and Indian financial institutions will equally hold 85 per cent in the SPV, while the remaining 15 per cent will be held by the Maharashtra State Electricity Board. MSEB would also purchase power from the plant which has been lying shut since 2001.

However, Banerjee brought to light that the assets of the plant would have to be acquired from the Debt Recovery Tribunal, which could entail competitive bidding.

"In that case, we are ready to put in a bid," he said. He added that the attempt would be to keep fixed costs low so that the plant can generate power at Rs 2.30 a unit.

To revive the plant, Gail is trying to source three million tonnes of liquified natural gas "" two million tonnes for the Dhabol power project and another one million tonne to make the re-gassification plant economically viable.

Two teams from NTPC and GAIL are positioned at the plant site to assess the condition of the assets.