New Delhi: The Rs 12,000-crore Dabhol power project will be split into separate power and LNG companies in an effort to revive the plant which was originally built by the now-bankrupt US energy firm Enron.
Ratnagiri Gas and Power Pvt -- a JV of state-owned power generator NTPC and gas utility GAIL, which took over the 1967 mw power plant and adjacent 5-million tonne a year liquefied natural gas (LNG) import terminal in July 2005 -- will be split into two separate firms - one to manage the power plant and the other to operate the LNG facility.
Ratnagiri Power Pvt will have same shareholders as RGPPL -- NTPC and GAIL hold 25.51 per cent each, the Maharashtra State Electricity Board (MSEB) 13.51 per cent and financial institutions the remaining 35.47 per cent.
Ratnagiri Gas will be an equal JV between NTPC and GAIL if MSEB which has been offered a small stake does not pick up equity.
Of the Rs 7,800 crore debt of RGPPL, about Rs 3,000 crore will be transfered to the new gas company.
Announcing the demerger plan, Power Minister Piyush Goyal said the plant, which has been shut for want of fuel (natural gas) for about one-and-a-half-years, will start generating electricity from November 1.
The generation would be through use of subsidy on LNG being provided under the Power System Development Fund (PSDF) set up by the government to help power companies buy expensive imported fuel.
The first 500 mw of electricity will be sold to the Railways after the Maharashtra government decided to forgo transmission charges to bring down the cost of power to Rs 4.79 per unit.
"All issues have been resolved. The project will now start generating electricity," Goyal told reporters after a meeting of the RGPPL board which approved the split.
The board of RGPPL, Goyal said, has approved the demerger
of the company into two -- one for power generation and the other for running LNG terminal.
The Minister said that after the demerger with the proper validation, one company will be called as Ratnagiri Power Company while the other will be known as Ratnagiri LNG Company.
According to the minister, there will be "a mirror image of shareholding pattern" in the two companies. Besides, NTPC and GAIL will further infuse fresh equity into the project and the lender will offer new credit.
The board has also proposed to raise the present capacity of LNG terminal to five million tonnes from the current three mt by adding break water facility with an infusion of Rs 2,000 crore to utilise it in the monsoon too. The surplus gas will be sold in the open market in Karnataka and Goa.
The Minister further said, "Today, at the board meeting, all pending issues related to stakeholders have been resolved and the plant will start generating 500 mw of power from November 1."
The power generated will be supplied to the Indian Railways at Rs 4.79 per unit and the Maharashtra government will waive off levies on gas and power to help the plant start production.
For restarting the Dabhol project, GAIL has also reduced its processing and transportation charges.
The minister said the proposals regarding waiver of levies, reduction in charge by GAIL and other issues will be approved by the board and respective authorities, including the Maharashtra government.