Dabhol project to be split into LNG and power firms

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 <g data-gr-id="21">mw</g> 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 <g data-gr-id="14">per cent</g>. 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 <g data-gr-id="15">transfered</g> 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 <g data-gr-id="22">use</g> 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 <g data-gr-id="16">mw</g> 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.