Gail India [Get Quote], National Thermal Power [Get Quote] Corporation and the Maharashtra State Electricity Board are slated to take over the 2,184 Mw Dabhol power project (though not the Dabhol Power Company).

According to industry sources, Indian lenders to the Rs 12,635 crore (Rs 126.35 billion) project recently moved the debt recovery tribunal to recover their dues. Gail and NTPC will bid for the project when it comes under the hammer. The Centre has approved this plan. The MSEB, too, will get an equity stake, although the Indian lenders are buying its 15 per cent holding in DPC.

Sources said the Indian lenders would buy out the foreign lenders, the insurers as well as the equity holders of DPC. General Electric and Bechtel hold 85 per cent of DPC after the combine bought Enron's 65 per cent stake in the beleaguered utility company.

The offshore lenders are being led by ABN Amro Holding NV and Bank of America. The Overseas Private Investment Corporation, a US government agency, had lent $140 million to the project, apart from insuring another $200 million lent by the US banks.

At a discounted price, the total value of the exposure of the lenders as well as equity holders is close to $800 million or over Rs 3,000 crore (Rs 30 billion).

According to an arrangement that has been arrived at, the State Bank of India [Get Quote], ICICI Bank [Get Quote] and Industrial Development Bank [Get Quote] of India will collectively chip in with Rs 500 crore (Rs 5 billion).

NTPC and Gail have committed another Rs 500 crore (Rs 5 billion) each, taking the total to Rs 1,500 crore (Rs 15 billion). The rest of the money is expected to be raised from the market as a 20-year fund on the strength of a government guarantee.

$125 mn award to bechtel

A Paris-based independent arbitration panel has ordered a final binding award of more than $125 million against the Maharashtra government and the state electricity board to compensate Bechtel for its investment in the defunct Dabhol power project.

The panel, under the auspices of icc International Court of Arbitration, has said Maharashtra and two affiliate agencies expropriated a Bechtel affiliate's interest in Dabhol Power Company and ruled that Bechtel should be compensated for its original investment and for interest and associated costs.