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Special cell to be set up to solve DPC wrangle

BS Bureaux

The lenders to the Dabhol Power Company have decided to constitute a special cell to speed up the process of finding a solution to the problem-ridden company.

The cell will be based at the headquarters of the principal domestic lender to the project - the Industrial Development Bank of India - in Mumbai. The domestic financial institutions and banks as well as the global lenders to the project will nominate their representatives to this forum.

"The cell will be constituted soon as this will help find a solution to the problem expeditiously. The domestic as well as the foreign lenders have huge sums at stake and the sooner a solution is found the better it is for us," said a senior official of a financial institution.

The domestic lenders have an exposure of about Rs 61 billion while the foreign lenders have an exposure of about $550 million. Topping the list of domestic lenders is IDBI with an exposure of about Rs 23 billion followed by the State Bank of India with Rs 18 billion and ICICI with about Rs 17 billion.

The global lenders to the project include Credit Suisse First Boston, Bank of America, Citibank, OPIC and ANZ Investment Bank. Enron, General Electric and Bechtel who hold a combined stake of 85 per cent have decided to exit the Dabhol Power Company, the special purpose vehicle which is setting up a near complete 2,184 mw power project in Maharashtra, following payment disputes with the Maharashtra State Electricity Board.

The balance 15 per cent is held by the MSEB. Tata Power and BSES have emerged as major contenders for buying out the foreign equity in the project. IDBI is trying to facilitate the sale process.

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