MSEB, FIs Seek Location, Condition Of DPC E-chip

Mumbai, September 25: | Updated: Sep 26 2002, 05:30am hrs
Though the Maharashtra State Electricity Board (MSEB) and Indian financial institutions are participating in the exploratory exercise for restarting the distressed 658 MW Enron-promoted Dabhol power project, they have expressed serious apprehensions over the use once again of the e-chip and coded CDs which had been removed from the project site earlier this year.

Power Ministry Forms Team To Inspect Dabhol
Our Infrastructure Bureau

New Delhi, Sept 25: Power ministry has constituted a high-level team consisting of officials from GE, Bechtel, NTPC, IDBI-led domestic lenders and MSEB to carry an in-depth inspection of the troubled Dabhol power project in Maharashtra.
Power secretary RV Shahi told FE that the team would shortly visit the plant, may be within a week.

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The FIs together have an exposure of a staggering Rs 6,200 crore in the Dabhol project.

A section of MSEB and the FIs, which had strongly protested the removal of the e-chip and coded CDs by the now-fallen Dabhol Power Company (DPC), have been of the view that its whereabouts should be known and its workability ascertained, before actually involving GE, Bechtel and the state-run National Thermal Power Corporation (NTPC) in a discussion on the resumption of power generation at the site.

Sources from MSEB and FIs told FE that although the beleaguered DPC had informed the Bombay High Court in January that the e-chip and coded CDs had not been airlifted to the US, but had been removed to a safer place within India, they would like to know whether these equipment in the present state could be used at all or would require extensive overhauling.

The basic question is nobody knows the state of these equipment without which the resumption of the Dabhol project is not possible. There is nobody from the troubled DPC to tell us where they have preserved these crucial equipment. So who is actually taking care of these equipment sources asked.

Further, according to these sources, they would like to know whether the Bombay High Court receiver, which has taken possession of Dabhol assets, was also taking care of the e-chip and coded CDs. They recalled that the beleaguered DPC, during the hearing on a petition challenging the jurisdiction of Maharashtra Electricity Regulatory Commi-ssion (MERC), had produced the e-chip and coded CDs before the Bombay High Court and offered to hand it over to the Industrial Development Bank of India (IDBI).

However, the latter had flatly refused to take care of the e-chip and coded CDs.

It must be mentioned here that DPCs former managing director K Wade Cline had communicated to the IDBI in January that upon various preparatory steps being taken, the asset is capable of being operated. He had also refuted the contention that the removal of various chips and coded CDs had converted the asset into a dead one.

However, sources at the MSEB and FIs said that the Dabhol project has been closed since May 29, 2001, and thus expressed their serious doubts over the use of the e-chip and coded CDs in their present form.

Sources said that even though a compromise among state government, MSEB and IDBI-led FIs on per unit tariff and the offtake of Dabhol phase-I was essential, it was also important to know who would incur the expenses on the overhaul of the e-chip and coded CDs, if that was required. So far, IDBI had recently indicated a figure of Rs 60 crore as start-up cost and, depending upon the offtake of 83 per cent plant load factor (PLF), it had arrived at a tariff of Rs 2.86 per unit. However, the state government has already rejected IDBIs offer and called upon the latter to reduce the interest rate from 13.5 per cent to 10 per cent, delink naphtha prices from the international crude prices thereby making them equivalent to Indian coal prices and, above all, a waiver of the two per cent minimum alternate tax.