JVSL's proposal was discussed at the heads of institutions meeting in Mumbai on Wednesday, sources said. However, no decision has been taken yet on the company's request.

The sharing of the interest deferment by the financial institutions is proposed to be in the following manner -- Rs 200 crore by ICICI, Rs 152 crore by IDBI, Rs 65 crore by IFCI, Rs 58 crore by LIC, Rs 28 crore by GIC, Rs 99 crore by Rs UTI, Rs 16 crore by SBI and Rs 9 crore by IIBI to fund the cost escalation, according to FI sources.

The financial institutions are also considering refixation of the repayment schedule of the existing long-term rupee loans, medium-term rupee loans, non-convertible debentures, optionally convertible debentures in line with the new term loans.

The Rs 929 crore increase in the project cost is mainly due to a rise in preliminary and pre-operative expenses of Rs 865.90 crore, foreign exchange fluctuation of Rs 72.50 crore and investments in joint ventures by Rs 53 crore. The foreign exchange fluctuation gets financial automatically due to the corresponding increase in foreign currency loans. The net increase in project cost comes to Rs 856.70 crore which is proposed to be financed by additional sponsors contribution of Rs 105 crore, interest deferment of Rs 632.30 crore, insurance reimbursement of Rs 25 crore and capital creditors of Rs 94 crore.

This is the third revision of the project cost by the company. JVSL had originally proposed to set up a 1.25 million tonnes per annum plant at a cost of Rs 3,300 crore in 1995. The capital outlay was revised to Rs 4,968 crore while the installed capacity was expanded from 1.25 mtpa to 1.60 mtpa.