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Journalism of Courage
Dabhol is back. The Naresh Chandra panel has convened a crucial meeting tomorrow with the Industrial Development Bank of India (IDBI), ICICI Bank and the State Bank of India (SBI). The meeting will discuss issues relating to the de-dollarisation of debt of offshore lenders and the open-bidding process and auction scheme, suggested by the US government-promoted Overseas Private Investment Corporation (Opic).
Union Finance Ministry sources confirmed that such a meeting had been convened, as it was the Naresh Chandra Panel which had strongly recommended the de-dollarisation of debt of foreign lenders as part of a four-pronged strategy to resolve the Dabhol impasse, in November last year.
IDBI chairman and managing director M. Damodaran, SBI chairman A.K. Purwar and ICICI Bank executive director Kalpana Morporia are expected to attend the meeting.
The Naresh Chandra panel, comprising Vijay Kelkar (Economic Advisor to the Finance Minister), and Pradeep Deb (Joint Secretary in the Finance Ministry), has called for the de-dollarisation of the offshore lenders’ debt of $1,044 million, excluding the loan by Opic.
The Indian lenders, with an exposure of over Rs 6,200 crore in Dabhol Power Company (DPC), will form a special purpose vehicle (SPV) to take over the offshore debt.
Secondly, the Chandra plan envisages that Opic will float tenders for sale of equity of the 65 per cent held by Enron through Enron Mauritius and thereby select the new sponsor of Dabhol project.
The new sponsor is also expected to settle the $120 million each of equity held by GE and Bechtel, as well as their contractual claims of Rs 650 crore. It will also take over the MSEB stake, thereby achieving 100 per cent control of Dabhol assets.
Also, the new sponsor will involve GE and Bechtel for the commissioning of Dabhol Phase-I (658 MW), which has been closed since May 29, 2001, and for the completion of Dabhol Phase-II (1,444 MW) which is 93 per cent complete.
The SPV, after taking over the debts of offshore lenders, will float privately-placed bonds at the lowest rate of interest at 4.9 per cent, thus extinguishing the claims and litigations of offshore lenders.
