NTPC to invest Rs 500cr in Dabhol

State-run NTPC Ltd will infuse an additional Rs 500 crore into Ratnagiri Gas and Power Pvt Ltd for completing the beleaguered Dabhol power plant. Also, the plant's LNG terminal will not be hived off as of now.

The empowered group of ministers (eGoM), headed by External Affairs Minister Pranab Mukherjee, today decided to ask NTPC to pump in Rs 500 crore into RGPPL. It also dismissed a proposal to hive off and sell the five-million-tonne liquefied natural gas terminal, official sources said.

Sources said while NTPC would operate the power plant, gas utility GAIL (India) Ltd would secure five million tonnes of LNG for the plant. The project requires 2.1 million tonnes of LNG. The remaining can be sold to other companies.

Both NTPC and GAIL had infused Rs 500 crore each to take a 28.33 per cent stake in RGPPL at the time of taking over Dabhol's assets. The Maharashtra State Electricity Board and IDBI-led lenders own the remaining equity.

The board of the generating company had earlier cleared the investment, company sources said. Incidentally, the board of GAIL had also approved an investment of Rs 500 crore but with a condition that it would be given the right to match the highest bid to buy the terminal in case it was hived off.

Sources said the additional investment would enable RGPPL to clear the dues of Punj Lloyd and its British partner Whessoe, the contractors for completing the unfinished LNG terminal adjacent to the 2,150 Mw power plant.

RGPPL had in May 2006 hired Punj Lloyd and UK's Whessoe to complete the LNG terminal but work had almost come to halt since December as RGPPL was not paying bills.

RGPPL needs Rs 450 crore for revival of power plant and Rs 565 crore for LNG works, but the cash-starved company does not have the money to pay the contractors, the sources said.