In an attempt to find a lasting solution for the troubled $2.9 billion Dabhol Power Project, GE said on Monday it was joining hands with NTPC and BHEL to restart it.

"GE Energy is joining a team from NTPC and BHEL to determine a course of action for restarting and completing the Dabhol Power Project," GE President and CEO Scott Bayman said in a statement in New Delhi.

The decision follows after the India visit of GE chairman and CEO Jeffrey R Immelt. GE and Bechtel effectively hold 85 per cent stake in the DPC. IDBI along with ICICI Bank [Get Quote], State Bank of India [Get Quote], Canara Bank [Get Quote] and others have an exposure of over Rs 5,000 crore (Rs 50 billion) in the DPC.

As soon as arrangements are complete, GE Energy would despatch its engineers and technical advisors to examine GE supplied turbines and related equipment.

Based on these evaluations and the findings of NTPC and BHEL, a detailed work scope and schedule for the restart of Phase I and completion of Phase II would be established.

Pleased with the course of discussion with the various stakeholders in the 2,184 MW DPC and looking forward to a complete resolution, Bayman said, "We are keen to put Dabhol behind us, assist with bringing power to people of Maharashtra and pursue our growth initiatives across a wide range of business sectors in the country."

Set up in two phases, DPC's Phase-I of 740 MW was earlier based on naphtha but was to be switched to LNG while Phase-II of 1,444 MW was based on LNG from the outset.

The Union Cabinet had recently given a go ahead to the government to stand guarantee to the domestic financial institutions to settle the foreign debts of the power company.

Indian lenders also wanted to buy back the equity of GE and Bechtel and settle their contractual payments, totaling $460 million.

A 'take-or-pay' power purchase agreement (PPA) between MSEB and DPC obliged MSEB to purchase 90 per cent of the power generated by DPC.

Due to commercial disputes between state government and Dabhol over pricing of electricity, Maharahstra had stopped buying electricity from Dabhol and a major dispute erupted between the two.

The process to resolve the DPC issue was speeded up after UPA assumed office. The new government set up an a group of ministers and asked the Cabinet secretariat to look into the issue.

The effort to restructure and restart Dabhol power plant comes in the wake of concerns raised by foreign promoters and the $6 billion claims filed by them in international arbitration at London for alleged breach of Bilateral Investment Protection Agreement.

According to finance ministry's earlier estimates, restarting the power plant would entail a cost of about Rs 1,800 crore or $390 million. This was required to complete the liquified natural gas terminal, complete Phase-II and pay contractual charges to GE and Bechtel.