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NTPC will not operate DPC on contract basis

The government said the National Thermal Power Corporation would neither take over nor operate the troubled $2.9 billion Dabhol power plant of Enron.

"There is no question of NTPC taking over the Dabhol Power project or even running it on a management contract basis," power secretary R V Shahi said in a statement dismissing news reports that the government might persuade NTPC to run the project on contract basis.

Enron shut the 740 MW Phase-I of the Dabhol project and stopped construction of the nearly complete 1,444 MW Phase-II last year after Maharashtra State Electricity Board, its lone customer, stopped buying power after a billing dispute.

Shahi said: "Till the issue (of purchase of power) is resolved between the lenders and MSEB, there is no question of anyone else taking over or running the plant on any contract basis."

Stating that purchase of power by MSEB as agreed in the contract of the power purchase agreement was the main issue, he said: "The basic issue of purchase of the entire power produced by the project is to be decided between the lenders and MSEB."

"The financial institutions and others would then look at the possibility of someone like NTPC running such a plant only as a contractor without any other obligation whatsoever," he added.

When contacted, NTPC chairman and managing director C P Jain said that the corporation had not received any instruction from the government on the issue.

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