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GE, Bechtel seek fee for Dabhol appraisal

Anil Sasi & Sidhartha in New Delhi

GE and Bechtel, which hold a 10 per cent stake each in Dabhol Power Company, have found a way to make money even before the plant, lying idle for over 18 months, is restarted.

The GE-Bechtel consortium has demanded $200,000 for assessing the state of the plant and equipment in Maharashtra. The foreign partners have said once the task is handed over to them, they will complete the study in 10 days.

The development comes after GE-Bechtel's demand for returning their equities, prior to restarting phase-I of Dabhol Power Company, was turned down by the government at a meeting earlier this month.

The government and the lenders are not very happy with the way the two companies have dealt with the issue of restarting the plant.

"They (GE-Bechtel) construe it as their best opportunity to put forth their demands," said a government official.

The sources added that the duo had been constantly putting a spoke in the efforts to restart the 2,144-mw power plant.

First, GE India President Scott Bayman wrote to the government, questioning the assumptions on the time required in restarting the plant.

While Bayman indicated a minimum time of 12-15 months, the government and the lenders have now come to the conclusion that generation from phase-I of the plant can be started in four to six months.

The consortium also said it was important to ascertain the state of affairs at the site. The lenders arranged a site visit at the end of October where the foreign companies expressed satisfaction at the upkeep and maintenance but added that there was a need to find out the condition of the equipment.

They came up with the suggestion that they were in a position to carry out the necessary inspection, for which a fee of $200,000 had been quoted.

Institutional sources said GE and Bechtel took the position that the lenders should first accept the commercial terms for assessment and documentation even before they could commence work.

National Thermal Power Corporation, which will play a crucial role in running phase-I, has said the assistance of the two foreign players will be instrumental, while power ministry officials say the consortium's role is not very crucial.

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