Dabhol: Chandra Panel Calls Meet With Lenders Today

Mumbai, March 23 | Updated: Mar 24 2004, 05:30am hrs
After a lull for sometime, there has been a sudden movement now on the Dabhol front in wake of the ongoing election process. The Naresh Chandra panel has convened a crucial meeting with Industrial Development Bank of India (IDBI), ICICI Bank and the State Bank of India (SBI) on March 24. The meeting will discuss issues relating to the dedollarisation of debt of offshore lenders and the open-bidding process and auction scheme, suggested by the US government-promoted Overseas Private Investment Corporation (Opic).

Union finance ministry sources confirmed that such a meeting has been convened as it was the Naresh Chandra panel which had strongly recommended the dedollarisation of debt of foreign lenders as one of the four-pronged strategy to resolve the Dabhol impasse in November last year. IDBI chairman and managing director M Damodaran, State Bank of India chairman AK Purwar, ICICI Bank executive director Kalpana Morporia are expected to be present at the Wednesdays meeting. The Naresh Chandra panel, which comprises Vijay Kelkar (economic advisor to the finance minister), and Pradeep Deb (joint secretary in the finance ministry, has called for the de-dollarisation of the offshore lenders debt of $1,044 million, excluding the loan by Opic. The Indian lenders, with an exposure of over Rs 6,200 crore in Dabhol Power Company (DPC), will form a special purpose vehicle (SPV) to take over the offshore debt. Secondly, Opic will float tenders for sale of equity of the 65 per cent held by Enron through Enron Mauritius and thereby select the new sponsor of Dabhol project, the Chandra formula envisages. Thirdly, the new sponsor is expected to settle the $120 million each of equity held by GE and Bechtel and also their contractual claims of Rs 650 crore.

It will also take over the MSEB stake and thereby achieving 100 per cent control of Dabhol assets. Lastly, the new sponsor will involve GE and Bechtel for the commissioning of Dabhol phase-I (658 mw) which has been closed since May 29, 2001, and also for the completion of Dabhol phase-II (1,444 mw) which is 93 per cent complete.

The SPV, after taking over the debts of offshore lenders, will float privately-placed bonds at the lowest rate of interest at 4.9 per cent. Thereby, the claims and litigations of offshore lenders will be extinguished.