Finance Ministry seeks loan rescheduling by FIs | business | Hindustan Times
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Finance Ministry seeks loan rescheduling by FIs

The finance ministry has sought a rescheduling of the loan repayment for the Ratnagiri Power project ( Dabhol) in wake of cost overruns of the 2100 mw power project.

business Updated: Dec 18, 2007 21:32 IST

The finance ministry has sought a rescheduling of the loan repayment for the Ratnagiri Power project ( Dabhol) in wake of cost overruns of the 2100 mw power project.

The cost of reviving the Dabhol power plant has increased by around Rs 2,594 crore to Rs 12,897 crore.

A committee of secretaries, comprising the Secretary ( Financial Sector), Petroleum Secretary, Power Secretary and Chief Secretary of the Maharashtra Government will identify the completion cost increase as per relevant provisions of the common long term agreement (CLTA).

“Appropriate steps will be taken subsequently,” a source said.

NTPC and GAIL (India), the promoters of Ratnagiri Gas and Power, which operate the power plant, have put in an additional Rs 500 crore each into the project.

The Dabhol plant, established by US energy firm Enron, is now run by Ratnagiri Gas and Power Pvt Ltd — a joint venture of state-run power generating company NTPC Ltd and gas utility GAIL (India) Ltd.

“Finance ministry officials has held detailed discussions in this regard for rescheduling to the loan repayment time line”, a source said.

Sources said the empowered Group of Ministers is not amenable to any further increase in power tariff as the money was being essentially raised for a liquefied natural gas (LNG) terminal.

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has agreed to buy power at Rs 3.10 per unit from the project. Of this about Rs 2.12 would be variable cost and 98.5 paise would be fixed cost. The variable cost is dependent on gas availability and price.

The plant would have a full capacity of 2,100 and will run on natural gas, which would be supplied by Petronet LNG Ltd.