GAIL, NTPC to buy 50% stake each in Dabhol

In a significant move, the government-owned firms GAIL (India) Ltd and National Thermal Power Corp Ltd have agreed to buy a 50:50 stake in a...

In a significant move, the government-owned firms GAIL (India) Ltd and National Thermal Power Corp Ltd have agreed to buy a 50:50 stake in a new company which will operate the assets of $2.9 billion Dabhol power plant. However, this will happen only after the lenders’ issues are resolved.

GAIL Chairman Proshanto Banerjee said the investment would be made through a special purpose vehicle (SPV). It is not known whether the SPV will buy out stake from the foreign partners or from the lenders directly. Both the companies will invest Rs 500 crore each in the SPV.

He said the two state-run companies would sell the Dabhol plant to the highest bidder after running it for a year or two.

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This is the first time GAIL has officially admitted that it has planned to pick up the stake in the SPV which will run 2184-MW Dabhol power project. NTPC was earlier sounded out by the government to pitch into the project. GAIL is interested in the LNG part of the project.

NTPC, which was listed on the bourses in November last year, is currently the second largest company with a market capitalisation of Rs 75,611.24 crore. GAIL, on the other hand, is India’s largest gas transporter.

The DPC project, located at Guhaghar, 300 kms South of Mumbai, is closed since June 2001.

The revival of one of India’s largest infrastructure project is crucial to Maharashtra government which is facing a massive power shortage. The Maharashtra government has already said it was keen to draw the power from the troubled Dabhol project after its revival.

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