GAIL said it will pump in about Rs 500 crore equity in a special purpose vehicle for restarting the Dabhol project, subject to the resolution of outstanding issues between the lenders and concerned parties.

GAIL and NTPC would pick up equal stakes in the defunct Dabhol project by pumping in Rs 500 crore each through a special purpose vehicle, GAIL chairman and managing director Prashanto Banerjee told reporters in New Delhi.

This is, however, subject to resolution of outstanding issues between the Indian and foreign lenders and other concerned parties, he said.

While NTPC would operate the plant, GAIL would look after the LNG terminal and sourcing of LNG. GAIL would complete the technical evaluation of the LNG terminal in next one-and-half months, he said.

Banerjee said the government should accord infrastructure status to the terminal and pipeline infrastructure and reduce the customs duty on LNG to zero per cent from the present five per cent.

With the coming up of five LNG terminals, the country could see an availability of 15-20 million tonnes of LNG in the next five years, he said. India has saved around Rs 743 crore on the long term LNG purchase contract with RasGas by linking the gas price at the crude oil price of USD 20 per barrel, during the recent upsurge in the crude oil prices.

In January 2005, foreign lenders to the Enron-promoted power project had agreed in principle to Indian lenders buying out their debt.

GAIL Chairman Proshanto Banerjee told reporters in New Delhi on Saturday that the investment into DPC would be made through a special purpose vehicle.

Early in January, a 30-member team from GAIL and NTPC team had begun assessing the plant.

Simultaneously, a team comprising government officials and executives from GAIL and NTPC had also left for the United States to negotiate the terms for buying out foreign stakeholders and lenders, including General Electric and Bechtel.

As per a proposal discussed by the empowered group of ministers under Defence Minister Pranab Mukherjee, the two public sector companies are to invest Rs 500 crore (Rs 5 billion) each for the restart of the plant.

Domestic Lenders, led by IDBI, are also likely to put in another Rs 500 crore in the consortium.