State-run power producer NTPC Ltd and gas firm-GAIL are not in favour of hiving off the LNG terminal, currently integrated with the erstwhile Dabhol power project in Maharashtra. NTPC is learnt to have already sounded the power ministry and its board about its decision to exit the Dabhol power project if the government hives-off the adjacent LNG import terminal and sells it to a third party. Both NTPC and GAIL had infused funds towards the revival of the Dabhol power project on the condition that the power plant would be run as an integrated power cum LNG terminal.

The power project and the LNG terminal are currently owned by Ratnagiri Gas and Power Private Limited?the company formed after an equity infusion of Rs 500 crore each by GAIL, NTPC and the financial institutions for reviving the beleaguered Dabhol power and LNG terminal project.

While NTPC chairman R S Sharma was not available for comments, GAIL chairman and managing director U D Choubey said his company favoured an integrated Dabhol power plant. ?We had invested in RGPPL on the premise that the power plant and LNG terminal would stay together. I am not aware of the decision to hive-off LNG terminal but if that happens, I will have to go to my Board to seek approval for staying invested in the changed project structure,? he said.

Sources said that NTPC informed its board about its decision to exit the Dabhol project after a committee of secretaries headed by cabinet secretary K M Chandrasekhar at a recent meeting virtually decided to sell the 5 million tonne per annum LNG import facility to stem massive cost overrun.

?Both NTPC and GAIL want the 2,150 mw gas-fired power plant and the LNG terminal to stay together and are against its hive-off,? a source familiar with the development said.

Sources said the RGPPL is again in a financial mess as the project revival cost of Rs 8,700 crore at the time of takeover of Dabhol, now stands at Rs 23,640 cr. NTPC had won the right of first refusal on the facility when it had approved additional equity infusion of Rs 500 cr last year.

Now, if the government decides to ignore its claim and invites bids from private firms, the company would exit the venture, the source said.