Bankers express concern over non-payment of Dabhol proj dues

Bankers have expressed concern over the non-payment of dues from Dabhol power project in Maharashtra with the plant being shut since October 2013 on account of severe gas shortage.
Banks have an exposure of Rs 8,500 crore in Dabhol power project, also known as Ratnagiri Gas and Power Private Ltd (RGPPL). The project has been facing difficulty due to non-availability of gas and dues to banks are not being paid by the company on time.
According to sources, bankers have raised concerns over non-payment of dues and want Finance Ministry to allow conversion of their debt into equity as a short term measure.

As part of the long term strategy, the government may use LNG and gas pooling. In the proposed gas pooling, state-run GAIL will ensure availability of LNG to RGPPL at USD 10 per unit, starting this month.
The plant, which will run at 40 per cent of its total capacity of 1,967 MW, will provide electricity at a cost of Rs 6.37 per unit.
Maharashatra government has to agree to purchase 650 MW of power from the plant at Rs 5-5.50 per unit or allow it to be sold to other customers who are willing to purchase at this price.

The government will provide subsidy for the differential amount as intimated by NTPC.

RGPPL, a joint venture between gas utility GAIL and NTPC, shut the Dabhol power plant in March after gas supplies from Reliance Industries' KG-D6 fields were stopped.
GAIL and NTPC hold 32.9 per cent each in RGPPL while the Maharashtra government has a 17.4 per cent stake.
Lenders to the project - IDBI Bank, State Bank of India, ICICI Bank and Canara Bank - hold the remaining 16.8 per cent.
The project, which was originally built by US-based energy major Enron Corporation, became inoperative after a billing dispute with Maharashtra and Enron's bankruptcy in 2001.