Dabhol portfolios likely to turn NPAs, RBI to lenders

by Sanjay Jog

Mumbai: The Reserve Bank of India (RBI) has informed lenders of the

 Dabhol power project that their portfolios in the project will become

non-performing assets (NPAs) soon if Ratnagiri Gas &

Power Pvt Ltd (RGPPL),

the owner and operator of the

Dabhol project, continues to

default on debt servicing.

Lenders including IDBI, ICICI, SBI and Canara Bank, which

collectively hold 27.08% in the project, have provided a loan

of over Rs 8,000 crore for its revival.

From April to September, MahaVitaran, the sole procurer

of around 930 mw of power from Dabhol project, owes

Rs 141 crore to RGPPL towards capacity charge component

of the total per unit tariff of Rs 3.50. If the situation continues,

the project will face closure.

RGPPL sources told on Tuesday, “The RBI’s warning did

come up for discussion at the RGPPL board meeting. Even

though the Appellate Tribunal for electricity in its interim

order has allowed the recovery of capacity charge of Rs 2.24

 against RGPPL’s demand of Rs 2.65, MahaVitaran is paying

 capacity charge of only Rs 1.01. It owes Rs 141 crore to RGPPL

 and this had led to a situation wherein RGPPL is not in a

position to service debt.”

Sources said that MahaVitaran has applied to the Maharashtra

 Electricity Regulatory Commission (MERC) for the recovery

of Rs 2.24 from its consumers so that debt servicing becomes

easy. However, MERC has yet to issue its order. Moreover,

 MahaVitaran needs to recover Rs 80 crore every month from

 its consumers to make up the gap.

More importantly, Rs 300 crore would be required immediately

to repair the damaged turbines and rotars. This is despite the

RGPPL recently entered into a comprehensive service agreement

 with GE which has supplied the 9FA turbine for the project.

 RGPPL had sought the capacity charge of Rs 2.65 so that

such a repair would have been possible apart from debt servicing.