The Tata Power Company, which has expressed interest in acquiring a controlling stake in the Dabhol Power Company, says tariff should be around Rs 2.5 per unit to make the troubled $3 billion, 2,184 mw project viable.
"We are interested in DPC and feel that the tariff should be at around Rs 2.5 per unit. This will make the project feasible," said Firdose A Vandrevala, managing director of Tata Power, in an informal chat with newsmen at Lonavala, about 100 km from Mumbai.
This is close to the benchmark tariff of Rs 2.60 to Rs 2.75 per unit suggested by lenders for funding new power projects. There is also an informal consensus among banks and financial institutions that projects sporting a tariff above this level shall not be funded.
Meantime, any prospective buyer of DPC will have to contend with US giants General Electric and Bechtel, who recently bought out Enron's 65 per cent stake in DPC and now hold around 85 per cent of the power company.
The two companies are seeking around $400 million for their stake including $140 million in contractual claims.
"There is an upside as well as a downside with GE and Bechtel acquiring Enron's stake. The downside is that we will now have to contend with two very powerful parties. The upside is that there will now be fewer players and there is no fear of DPC becoming a part of Enron's bankruptcy proceedings," said Vandrevala.
Last week, the domestic and foreign lenders of DPC, who have a combined exposure of around $ 1.86 billion to the project, met in Singapore to find a solution.
The haircut -- or loss in interest -- that lenders are expected to take as apart of an overall solution is expected to result in a lower cost of acquisition and pave the way for reduced tariffs.