Govt framing new package for Dabhol

 Indian lenders to settle dues with foreign lenders GE, Bechtel.

The new revival package for Dabhol Power envisages a tariff of Rs 2.20 per kilowatt hour and allows Indian lenders to take over the company's assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi)Act.

The tariff comprises a capacity and variable charge of Re 1 each per unit and a liquefied natural gas regassification charge of 20 paise a unit.

Under the proposal, which is being discussed by the Empowered Group of Ministers (EGoM) on the revival of the project, the Maharashtra State Electricity Board is to buy power from the project on a long-term basis at 80 per cent plant load factor for the entire 2,184 megawatt capacity. The plant is expected to take around 18 months before it can be restarted.

Prior to the restructuring exercise, the government is planning to settle GE and Bechtel's claims of around Rs 1,500 crore.

Gail India and National Thermal Power Corporation, the two stakeholders in the special purpose vehicle for the project, would infuse around Rs 1,200 crore, senior government officials said. The proposal is expected to be discussed by the EGoM later this week.

During the restructuring exercise, Indian lenders are to first form a financial special purpose vehicle to buy out the offshore lenders and Opic by issuing government-guaranteed bonds of over Rs 3,000 crore.

This SPV would buy out the financial SPV in an all cash deal before redeeming the government-guaranteed bonds.

The EGoM will also discuss the proposal to allow lenders to take over the secured debt and either lease, assign or sell the assets to the Project SPV under the Sarfaesi Act. The process is likely to take around 90 days, including the mandatory 60-day notice to be given under the law.

The other option is to approach the Debt Recovery Tribunal, seeking transfer of the Project SPV.

The proposal was discussed earlier but was found to be time consuming and could take up to six months to start the process of asset transfer.

Sparking new life, step by step

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1. Government of India/ Group of Ministers to issue concession letter
2. The government to provide guarantees
3. Indian lenders to settle dues with foreign lenders GE, Bechtel
4. Lenders to take over assets
5. Gail, NTPC to set up SPV, begin construction
6. April 1, 2006: Project to commence operations