Lenders might declare Dabhol project NPA in two weeks

RGPPL cites lack of funds to repay loan, pay wages

The Ratnagiri Gas & Power Pvt Ltd (RGPPL) on Tuesday indicated that lenders of the 1,967 Mw Dabhol project, might declare it a non-performing asset (NPA) within the next two weeks.

The trigger is RGPPL’s default in repayment of a debt installment of Rs 108 crore in June. RGPPL has conveyed to the lenders that it has no more funds for debt servicing until it partially recovers power sale dues from MahaVitaran and power generation is restored with immediate gas supply. The Dabhol project, which has been closed since December 28 last year for want of gas, is currently under preservation and maintenance.

“The project would have turned NPA in March but that was averted after RGPPL repaid Rs 150 crore received from MahaVitaran. RGPPL, which is facing a severe financial crunch, paid Rs 90 crore each to lenders in April and May but defaulted in June. The company has also defaulted on debt repayment to Power Finance Corporation. There are no funds left to repay debt. There is no money even to incur project site expenses,” an RGPPL official, who did not want to be named, told Business Standard.

The official informed that RGPPL had sent to MahaVitaran, a total bill worth Rs 2,292 crore for the period between April 2013 and June 2014 towards fixed charge and surcharge. During 2013-14, MahaVitaran paid a mere Rs 648 crore and in the current year, it had not yet paid Rs 309 crore. So MahaVitaran's total dues till date were to the tune of Rs 1,644 crore.

The RGPPL official informed that of the total debt of Rs 8,500 crore, so far, it had repaid Rs 4,000 crore to Dabhol project lenders since the project was revived in April 2006. The lenders, which include ICICI Bank, SBI, Canara Bank and IDBI Bank, have reiterated that they are left with sole option of declaring the project as NPA after two weeks if the debt repayment installment was organised.

However, a MahaVitaran official said it had bailed out RGPPL in March but would not do it all the time. “Let there be power generation and only then will MahaVitaran draw the power and pay for the same. MahaVitaran has been opposed to run the project on re-gassified liquefied natural gas, citing that the per unit tariff will increase and it won't be able to bear the additional burden. The matter is currently at the Appellate Tribunal for Electricity.”

Meanwhile, NTPC, which holds a 32.9 per cent stake in RGPPL, has repatriated 13 of its total 72 employees at the project site and deployed them in its various plants. NTPC will soon take a call to further withdraw its remaining 59 employees for lack of any work. This apart, GAIL India, which also holds 32.9 per cent stake, has 46 employees deployed at the project site, while 33 are from the RGPPL cadre.

Dabhol project : Uncertain fate

• Project is closed since December 28 last year for want of gas
• RGPPL faces severe financial crunch, it has no funds even for site expenses
• Already defaulted in June installment of debt servicing to lenders
• MahaVitaran insists on restoration of power generation, opposes to run project on RLNG
• NTPC repatriates 13 of the 72 employees as project is under maintenance