Govt to talk to GE, Bechtel over restarting DPC

In an attempt to restart the controversial Enron promoted Dabhol power project, the power ministry is holding high-level talks with minority partners, GE and Bechtel, who have demanded $200,000 for conducting a 10-day on-site analysis of the incomplete and idle 2,184 MW project in Maharashtra.

When contacted, power secretary R V Shahi said that a meeting with the officials of GE and Bechtel along with representatives of US government's Overseas Private Investment Corporation is due on February 6 with regard to restarting power generation from Dabhol Power Company.

"There is no change in GE and Bechtel's proposal. They are going to demand a flat fee of $200,000 for their $200 million equity in DPC," said financial institution sources.

The officials are also planning to hold parleys with the finance ministry in the next few days to arrive at a plausible solution for restarting the power project, which has been lying idle for the last 20 months.

GE India president and chief executive officer Scott Bayman is to seek a settlement of their pending dues worth at least $120 million and also an ‘agreement in principle' with respect to the 10 per cent each equity in DPC.

Sources said Bayman is also expected to convey to the government that upon completion of the 10-day initial assessment, GE and Bechtel would be in a position to prepare a restart plan for the beleaguered project's phase-I.

Prior to providing such a plan, Bayman may seek a resolution of the outstanding equity claims of the two US companies, the sources added.

Both the companies have offered their services and have agreed to share their expertise for restarting the $3 billion plant and pegged an approximate timeframe of 8-9 months for it.

The firms have demanded an 'exclusive' site visit to the plant to open and study its condition and then submit a detailed report along with the actual cost of restart, the sources added.

"GE and Bechtel will have to usher in experts from abroad as nowhere in the world have they restarted a power plant which has been lying idle for over 20 months now, which poses a challenge for them as well," sources added.

A high-level team comprising at least 30-45 experts from various fields of electrical, mechanical, construction engineers will fly down to Guhagar, the plant site, to carry out the study, they said.

Contrary to the general information that the entire plant is 96 per cent complete, they said while 98 per cent of the power plant is ready, the five million tonne LNG facility is only 75 per cent complete and its contractors are Enron, Kvaerner and Punj Lloyd, not GE and Bechtel.

The Industrial Development Bank of India-led lenders to the project are now desperate to complete the project and then sell the assets of the $3 billion plant.

In December last, IDBI had returned the $100,000 earnest money to seven companies who were in the fray for picking up the 85 per cent foreign equity in the power project.

Tata Power Company, BSES Ltd, Reliance Industries, Royal Dutch Shell, Gaz De France and GAIL Ltd had evinced interest in DPC and its 5 million tonne LNG terminal.