The Hindu : GE, Bechtel have to wait to recover equity in DPC

Online edition of India's National Newspaper
Thursday, Nov 28, 2002

Business

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GE, Bechtel have to wait to recover equity in DPC

MUMBAI NOV. 27. In a setback to the only two active stakeholders of the beleagured Dabhol Power Company (DPC) the Central Government has asked GE and Bechtel to "forget as of now" recovery of their ten per cent equity each in the idle 2,184 MW project.

"We have written to GE that as of now both companies (including Bechtel) should lay to rest their claim for recovery of investment up to $120 million each in the project. We shall think of it only after making the project viable, which is possible once it resumes power generation leading to an inflow of revenues," top Union Power Ministry sources told PTI here.

Both engineering and construction majors have been seeking a fair treatment for their equity position and have also agreed to share their technical expertise for revival of the $3 billion asset which has not generated power since last 18 months.

When contacted the Union Power Minister, Anant Geete, said both GE and Bechtel had been told to keep aside their `equity issue' and help the State-owned National Thermal Power Corporation (NTPC) restart the plant.

Asked whether the two MNCs had demanded any compensation for sharing their expertise with NTPC, Mr. Geete said, "First they will have to firm up modalities with NTPC for putting DPC plant back on stream. If NTPC is unable to restart on its own, then we shall request for their actual involvement and pay them on our terms".

Mr. Geete said during his recent visit to the U.S., Bechtel president, Tim Statton, had assured all possible assistance for reviving the 2,184 MW plant and had put any condition (like fee) for extending support to NTPC to restart the facility.

GE and Bechtel have sought a 12 to 15 weeks duration for a `thorough' study of the plant and a separate exclusive two month site visit for its experts to assess the "actual state and good working knowledge of the facility's current condition".

The partners have pegged an approximate timeframe of eight-nine months for firing the 658 MW first phase of the DPC plant after its revival.

"The firms said they would have to usher in experts from abroad as nowhere in the world had they restarted a power plant which had been lying idle for one and half year 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.

Contrary to the general information that the entire plant was 96 per cent complete, he said, while 98 per cent of the power plant was ready, the 5 million tonne LNG facility was only 75 per cent complete and its contractors were Enron, Kvaerner and Punj Lloyd not GE and Bechtel.

Fallen energy major Enron Corporation's troubled power plant, located in scenic Guhagar off the Konkan coast of Maharashtra has been lying idle since May 29, 2001, after its sole buyer MSEB stopped buying power and also refused to cough up dues up to $600 million. — PTI

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