The state government and MahaVitaran strongly argued that according to the common term loan pact (CTLA), the increase in project cost must be borne by lenders comprising ICICI Bank, IDBI, State Bank of India and not the purchaser of power. However, the lenders were adamant that they would not alone pump in funds to meet the rise in the revival cost.
On July 28, the Cabinet secretary directed the Central Electricity Authority (CEA) to look into the issue and submit a report to him. Sources, who were present at the meeting said, The revival cost has shot up mainly due to delays in the completion of the gas pipeline, LNG terminal and also partly due to closure of the gas supply deal. Former Cabinet secretary BK Chaturvedi had chaired several meetings to discuss who would bear the additional cost.
On Friday, the state government and MahaVitaran refused to take on the additional burden and reiterated that according the CTLA the lenders should take the hit. The Cabinet secretary thereafter asked the CEA to make its recommendations on this issue.
Similarly, the meeting also discussed the issue of hiving off the LNG terminal with 5 million tonne per annum capacity at the project site. GAIL India, which holds a 28.3% stake in the project though shown its desire to take over the LNG terminal, withdrew. Subsequently, NTPC, offered Rs 500 crore as an initial instalment to take charge of the LNG terminal.