RGPPL seeks Rs 300-cr loan from PFC

Written by Sanjay Jog | Mumbai | Updated: Jan 13 2009, 05:20am hrs
The beleagured 2,150 mw Dabhol power project, which is being recognised by the lenders as stressed assets due to lack of sufficient revenue generation and problems in the loan and interest payments, is expected to get a fresh lease of life.

After a total denial of additional funds for the completion of revival process by the lenders to the project, the Ratnagiri Gas & Power Pvt ltd (RGPPL) has approached the state-run Power Finance Corporation (PFC) to get a loan of Rs 300 crore which is needed mainly for the repair and restoration of two turbines.

Interestingly, the Maharshtra government, which is relying heavily on the complete revival of the project, has decided to provide a sovereign guaranteed to RGPPL for the proposed loan from PFC. The state government would charge a 2% guarantee fee for the same.

RGPPL sources told FE Due to the increase in the project revival cost to around Rs 12,500 crore from the original estimates of Rs 10,038 crore, the lenders comprising IDBI Bank, ICICI Bank, SBI have refused to share the additional burden. Instead, they have been arguing a rise in per unit tariff by at least 70 paise so that the company can get revenue to service their loans.

Currently, two turbines are under repairs and due to lack of comprehensive maintenance and service agreement with GE, which has supplied 9FA turbine, the latter has been making several demands and it is delaying the restoration. Thus RGPPL board recently thought to approach PFC for a loan of Rs 300 crore. As reported by FE recently, the finance ministry has upheld the lenders submmision and informed the cabinet secretariat that the project may be classified as a NPA in line with the RBI guidelines entailing making provision for a sum of Rs 8,000 crore in the balance sheet of the various lending entities. The requirement of provisioning would impact the lenders adversely. The project was originally scheduled to be completed by November 2006 and even after two years of additional time it has yet to be revived fuly.

According to sources, turbine generator (TG) sets with capacity of generating 1815 mw had been revived. However, TG sets worth 1,110 mw have experienced mechanical failure, while another, capable of generating 370 mw, has been put under preventative shutdown on the advice of GE and for the installation of a Blade Health Monitoring System.

Only TG-1B, rated at 335 mw is operational and is generating power in the range of 300 to 320 mw. There the project is able to generate around.