SBI chairperson seeks government intervention to save Rs.8,500 crore exposure of banks
Warning that the 1979 MW Dhabol power project of Ratnagir Gas and Power Pvt. Ltd. (RGPPL) is on the verge of becoming a non-performing asset (NPA), State Bank of India (SBI) has sought government intervention by allocating adequate gas to the project to ensure its smooth operations.
Earlier, ICICI bank had informed the government that the project was turning into NPA due to government’s failure to allocate adequate gas.
In a letter to Power Secretary P. K. Sinha, SBI chairperson Arundhati Bhattacharya has pointed out that RGPPL has not been able to service interest for August to October, and instalment for the September quarter due to lenders.
Rs.8,500 cr exposure
Further, the letter has pointed out that the exposure of public sector lenders, now about Rs.8,500 crore (SBI’s share Rs.1,752 crore), was restructured once in 2009 under the guidance of the Ministry of Power due to delay in implementation of the project.
The company has no funds and it is on the verge of default in meeting the repayment commitments because of stalled operations due to non-availability of fuel. This would result in slippages of asset quality, which would be a setback for the lenders despite their sacrifices through waivers and concessions in reviving the project, the letter adds.
“We request you to use your good offices in ensuring adequate supply of gas for the project to enable the power plant to run without interruption to protect the interests of all the stakeholders.
“We request you to take up with the Power Ministry and the Government of Maharashtra for payment of dues to RGPPL immediately so that the company would be able to meet its repayment commitment to the lenders in time to tide over the crisis,’’ the letter states.
The current plant load factor (PLF) of the Dhabol project has fallen to 29 per cent, much lower than 45 per cent in April and 38 per cent in May.
For RGPPL to achieve break-even and service its current debt obligations, it has to operate at a PLF of 69 per cent during 2013-14 and 79 per cent in 2014-15.