Indian lenders to the Dabhol power plant are close to a settlement with Bechtel, which will clear the last major hurdle in reviving the 2,184 MW power plant that has been shut for over four years.

"The representatives of Indian financial institutions on Saturday told the empowered group of ministers that they are negotiating with Bechtel and hope to reach a settlement in a couple of days," power secretary R V Shahi told PTI after the meeting of the EGoM on Saturday.

The settlement with Bechtel, who, along with GE, owns 85 per cent in the Dabhol Power Company, would pave the way for restarting the gas-based plant in Ratnagiri, Maharashtra.

IDBI-led Indian FIs have already reached an agreement with GE for $145 million to be paid in phases, Shahi said, but declined to reveal the amount to be paid to Bechtel.

Sources said the EGoM, headed by Defence Minister Pranab Mukherjee, also cleared a Cabinet note containing the entire settlement package on Dabhol, including payments to GE, Bechtel and overseas lenders. The note would now be placed before the Cabinet for approval.

Besides GE and Bechtel, Indian lenders have also reached an agreement with over two dozen overseas lenders to the project as well as with the US government-promoted Overseas Private Investment Corporation.

The agreement with Bechtel assumes importance as it comes close to the July 18 date at the London Arbitration panel where GE and Bechtel had filed claims of over $6 billion against the Indian government for breach of investment protection pacts.