According to NM Rothschilds time schedule, the new buyer would be identified by January 2004 and the financial closure with the buyer and lenders will be done by June next year. The restart of Dabhol phase-I (658 mw) is expected around September 2004 and the commissioning of phase-II (1,444 mw), which is almost 93 per cent complete, by March 2006. The phase-1 has been closed since May 29, 2001, after the Maharashtra State Electricity Board (MSEB) suspended power purchase from DPC.
The financial consultant has clarified that the tenure of the new power purchase agreement (PPA) between the buyer and MSEB may be 15 or 20 years, depending on the terms of restructuring of the debt. The tenure of the previous PPA between DPC and MSEB was also 20 years.
The NM Rothschild report, submitted to IFIs, currently holding talks with the state and Central governments for various sops, assumes importance since GE and Bechtel have claimed $1,200 million from the Indian government for recovering their investments.
Top sources told FE that NM Rothschild, which was roped in by IFIs after the Bombay High Court on April 8 prohibited any move by offshore lenders and DPC to take control of the assets, has made it clear that the per unit tariff of Rs 2.80 would be subject to a pass-through of change of naphtha/ LNG cost over the current cost and any exchange fluctuation in rupee-dollar rates. The Maharashtra government and MSEB have already given consent to the per unit tariff, which was subsequently supported by the Industrial Development Bank of India-led IFIs.
According to NM Rothschild, fuel charge based on naphtha works out to Rs 2.23 per unit for fiscal 2003-04. Fuel charge based on LNG (without re-gas charge) works out to Rs 1.27 per unit and with re-gas charge to Rs 1.43 per unit for 2003-04. The current cost for naphtha is estimated at Rs 12,675 per tonne.
NM Rothschilds proposal envisages MSEBs offtake of Dabhol phase-I power at 83 per cent plant load factor (PLF), in addition to drawal of phase-II power at 30 per cent PLF.
The report strongly recommends that MSEB would have to offer an irrevocable letter of credit (LC), and its amount would be equal to the sum of one month capacity charge based on 100 per cent PLF and one month energy charge based on generation at PLF of 100 per cent. According to it, MSEB would put in place an escrow mechanism which would be funded with revenue from payments due from its customers comprising one or more circles. The amount of escrow would not be less than 120 per cent of the LC amount and it would be operational within three months of financial closure by September 2004.
According to NM Rothschild, MSEB would need to commit a take-or-pay at 80 per cent availability.