The Centre's revival strategy for the 1967 MW Dabhol power plant includes a proposal to hive off its liquefied natural gas (LNG) terminal. An inter-ministerial meeting will discuss a host of proposals in this regard and one of the immediate objectives would be to find ways to service the Ratnagiri Gas and Power's ( RGPPL) Rs 8,500-crore debt to lenders, including IDBI Bank, SBI, ICICI Bank and Canara Bank.
Finding ways to enable the Maharashtra State Electricity Distribution Company (MSEDCL) repay outstanding dues of Rs 1,450 crore to RGPPL is also on the agenda of the meeting, sources said.
According to RGPPL, which manages Dabhol project, MSEDCL has to pay around Rs 400 crore as fixed costs and other charges incurred last year, but this claim has been disputed by the state power utility. RGPPL had claimed that the balance debt service charges for the current year is around Rs 629 crore, including Rs 152 crore to prevent an asset downgrade.
The finance ministry, in the last meeting on this issue, warned that in case the parties are not able to amicably resolve the issue, it could resort to the option of recovering money from the Central Fund meant to be transferred to Maharashtra just to ensure the debt to the power company is duly paid, the sources said.
Though the finance ministry had asked the RBI to extend regulatory forbearance for the project, the banking regulator had rejected the plea.
The meeting will also consider the proposal of the petroleum and natural gas ministry that an empowered group of ministers look into the issue of gas allocation to RGPPL. The proposal is to give RGPPL the same priority as fertiliser units for gas allocation. Though RGPPL was to get gas from RIL's KG-D6 gas field, it did not materialise. Then RGPPL entered into an arrangement with GAIL for importing gas to meet the requirements.
The proposal to hive off the LNG terminal calls for separation of the debt with respect to the LNG terminal. Discussions will be on regarding the feasibility of this exercise, considering the difficulties in finding entities to operate the LNG terminal with the debt component, or in writing off the debt altogether or to transfer it to the power plant.
Besides, the meeting will look at whether the state government/MSEDCL is paying RGPPL the minimum debt servicing amount and the operational and maintenance costs as a temporary measure, till the power plant earns enough revenue to meet it through its own operations.
Finding ways to enable the Maharashtra State Electricity Distribution Company (MSEDCL) repay outstanding dues of Rs 1,450 crore to RGPPL is also on the agenda of the meeting, sources said.
According to RGPPL, which manages Dabhol project, MSEDCL has to pay around Rs 400 crore as fixed costs and other charges incurred last year, but this claim has been disputed by the state power utility. RGPPL had claimed that the balance debt service charges for the current year is around Rs 629 crore, including Rs 152 crore to prevent an asset downgrade.
The finance ministry, in the last meeting on this issue, warned that in case the parties are not able to amicably resolve the issue, it could resort to the option of recovering money from the Central Fund meant to be transferred to Maharashtra just to ensure the debt to the power company is duly paid, the sources said.
Though the finance ministry had asked the RBI to extend regulatory forbearance for the project, the banking regulator had rejected the plea.
The meeting will also consider the proposal of the petroleum and natural gas ministry that an empowered group of ministers look into the issue of gas allocation to RGPPL. The proposal is to give RGPPL the same priority as fertiliser units for gas allocation. Though RGPPL was to get gas from RIL's KG-D6 gas field, it did not materialise. Then RGPPL entered into an arrangement with GAIL for importing gas to meet the requirements.
The proposal to hive off the LNG terminal calls for separation of the debt with respect to the LNG terminal. Discussions will be on regarding the feasibility of this exercise, considering the difficulties in finding entities to operate the LNG terminal with the debt component, or in writing off the debt altogether or to transfer it to the power plant.
Besides, the meeting will look at whether the state government/MSEDCL is paying RGPPL the minimum debt servicing amount and the operational and maintenance costs as a temporary measure, till the power plant earns enough revenue to meet it through its own operations.
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