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BSES seeks mega project status for Dabhol

BS Bureaux

Power major BSES which has evinced keen interest in acquiring a 85 per cent stake in the Dabhol Power Company has sought mega power project status for the Dabhol project.

"We have suggested this as one of the measures for bringing down the capital cost of the project which, in turn, will translate into lower tariffs. This has been mooted by us at various meetings with the government as well as in the recent meeting with lenders at Singapore," said R V Shahi, chairman and managing director, BSES.

The conferring of such a status will enable the project to bag a slew of tax concessions including reduction in customs duties. It will also enable the plant to sell power across states.

Global energy major Enron which holds 65 per cent stake in DPC has decided to exit the power project along with its two US partners General Electric and Bechtel who hold 10 per cent each. BSES as well as Tata Power have evinced keen interest in this stake.

BSES is planning to conduct due diligence through an internal task force, which will be assisted by a group of consultants.

It is official now that the two parties have evinced interest in acquiring a 85 per cent stake in the project. The Industrial Development Bank of India has officially acknowledged for the first time that the issue was discussed at last week's meeting of lenders at Singapore.

The institution has said in a press release, " The issues discussed at the meeting included completion of Phase-II of the project and the cost thereof, sale of shareholding by Enron Corporation, Bechtel Enterprises Inc, and General Electric (all of US), in DPC (aggregating 85 per cent of total capital) to either of the prospective new sponsors viz. BSES and Tata Power. The meetings were fruitful and are expected to pave the way towards the solution to the various issues faced by DPC."

At the meeting in Singapore both the prospective sponsors evinced keen interest in the purchase of Enron and its associates' shareholdings and discussed in detail with IFIs as well as Enron, several issues relating to the project which would have an impact on the pricing of the shares.

Towards this end, brief features of the incentive package prepared by a committee appointed by Centre for the purpose, were discussed.

The officials of DPC/Enron also clarified various technical and operational issues, which would need to be resolved for smooth transfer of management and successful operation of the plant by the new sponsors.

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