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FIs ask DPC to restart phase-I immediately

Financial institutions led by IDBI have asked the Dabhol Power Corporation and Maharashtra State Electricity Board to restart the operations of Phase-I immediately to expedite the process of revival of the project.

The FIs have also suggested that power generated from DPC phase-I can be sold at a lower rate now and the arrears, if any, could be settled once the final deal for the project was struck, industry sources said in New Delhi.

FIs are understood to be seeking a package to revive the mega project aimed at substantially lowering the power tariff from about Rs 6 to about Rs 2.50 a unit.

Since two companies -- Tata Power and BSES are negotiating with the project promoters and the process of due diligence was in progress, FIs said the project in the operational stage would give a much better deal.

The FIs having an exposure of over Rs 60 billion in the project have also approached the Centre and other promoters-- Maharashtra government, DPC and lenders for concessions and incentives as an effort to sell it to a prospective buyer.

FIs have submitted a memorandum of suggestions to the Power Minister Suresh Prabhu and Finance Minister Yashwant Sinha for their consideration.

Once the financial package along with concessions and incentives was finalised, the cost of the power would automatically come down, sources said adding that arrears arising out of power sold at low rate now could be adjusted later.

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