When the Dabhol assets were taken over by the Ratnagiri Gas & Power Pvt Ltd (RGPPL) in October 2005 at the projected revival cost of Rs 10,300 crore, the Centre and the RGPPL equity holders, comprising banks and financial institutions, NTPC, GAIL India and MSEB Holding, had considered the capital cost of around Rs 4.5 crore per megawatt. However, delays in the projects revival, frequent tripping and damages to turbines had led to an increase in the revival cost to over Rs 12,500 crore, as well as a rise in the interest during construction. Before the project was closed down for five years, the installed capacity was projected to be 2,150 mw. But the RGPPL has already indicated that the 9FA turbine supplied by GE will not be able to fully generate 2,150 mw and that the generation will be lowered to 1,850 mw. According to the revised projects by the Centre and RGPPL, the project revival will be completed by May only if GE is able to supply spares and finish repairs.
The repairs and restoration of broken turbines have further added to the revival cost and all these factors have resulted in a surge in the capital cost to a record Rs 6 crore per megawatt. RGPPL sources told FE on Thursday, The capital cost will further increase to Rs 7 or Rs 7.5 crore per megawatt if RGPPL decides to spend nearly Rs 1,000 crore to construct a huge wall for a breakwater project. Lenders, who have already asked RGPPL to freeze the revival cost, have indicated that they will not be able to share an additional burden. RBI has also asked banks and financial institutions to declare their exposure to the Dabhol project as distress assets if non-payment of loans continue. The RGPPL board is meeting on January 30 and is expected to debate on these crucial issues.