The Hindu Business Line : Immelt meets Sayeed on sale of equity in Dabhol project

THE General Electric CEO, Mr Jeffrey Immelt, on Thursday met the Power Minister, Mr P.M. Sayeed, to discuss the position taken by the company on the sale of equity in the idle 2,184-MW Dabhol Power project.

According to official sources, Mr Sayeed conveyed the need for a consensus between the Indian lenders to the project and the GE-Bechtel combine on the valuation and procedural details of sale of the latter's equity in the project as a prerequisite to any possible efforts at restarting the facility.

GE and Bechtel Inc together own 85 per cent in Dabhol Power Company (DPC).

Thorny issues, including GE and Bechtel's insistence on wanting a guarantee from the Government indemnifying them against the liabilities of Dabhol Power Company prior to the sale of equity, were also taken up at the meeting, Government sources said.

Mr Immelt subsequently met the Power Secretary, Mr R.V. Shahi.

The project, the country's largest foreign investment project to date, was shut down in June 2001 after a dispute over electricity prices between the then-owner Enron and its only customer, the Maharashtra State Electricity Board (MSEB). While GE and Bechtel together own a controlling stake in DPC, MSEB holds the remaining 15 per cent stake.

As per the revival strategy finalised by the Empowered Group of Ministers looking into the issue, the Indian lenders, led by IDBI and State Bank of India, will buy out the offshore debt of foreign lenders and settle the equity claims of GE and Bechtel.

After settling all claims, the state-run National Thermal Power Corporation and GAIL (India) Ltd would run the power plant and the LNG terminal respectively.

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