Union Government to discuss Dabhol revival

New Delhi: The Union government is likely to call a high level meeting to discuss the Overseas Private Investment Corporation's (OPIC) move to buy out Enron Corporation's entire 65.15 per cent equity in the troubled Dabhol Power Company (DPC) and to finalise a revival package for DPC.

According to Maharashtra government sources, the high level meeting is likely to discuss OPICs willingness to dilute its equity in the project and the settlement and restructuring of the debt owed to it by DPC. It is expected that the Reliance Energy and Tata Power Company, the two bidders for DPC, will attend the high level meeting.

OPIC's loan outstanding to DPC is Rs 502 crores for phase 1 and Rs 408.9 cores for phase II. OPIC will pay around Rs 103.4 crores to Enron Corporation to buy out the equity. OPIC had already paid a political risk insurance claim of Rs 267.9 crores and additional interest of Rs 28 crores to GE and Bechtel for their investments in DPC.

"Both the centre and state government are keen to settle the DPC issue. The Maharashtra government wants to settle it as soon as possible because the state government wants to buy the entire DPC power output to tackle the power crisis in the state." state government officials said.

The IDBI-led consortium of domestic lenders, with exposure in the $3 billion Dabhol power project has recently got the approval from the centre to raise Rs 720 crores through tax-saving bonds for restarting the project. IDBI had approached the government for permission to mop up about Rs 5,000 crores through such bonds over the next couple of years. Allowing domestic lenders to raise money is part of the government's strategy for operationalising the project.