The decks have been cleared for starting the debt recovery process in the Dabhol power plant. The Gail India board on Friday cleared a Rs 500-crore (Rs 5 billion) investment in Ratnagiri Gas and Power Pvt Ltd, a special purpose vehicle set up to revive the plant.
The National Thermal Power Corporation board had earlier cleared the investment in the company.
An empowered group of ministers on Dabhol, which had met earlier, had, however, not given the Gail and NTPC boards the clearance to invest Rs 500 crore each in SPV.
The minutes of the GoM's meeting had failed to mention the issue. The minutes, however, have been revised to incorporate the necessary waiver for the boards' decision to have official sanction.
"The matter is merely procedural. The issue was discussed and it was decided to empower the Gail and NTPC boards to clear these investment decisions. The relevant part was, however, erroneously dropped when the minutes were drafted," said officials.
NTPC and Gail are "navratna" companies and their boards have the freedom to approve investments of up to Rs 200 crore (Rs 2 billion). They were to get a one-time clearance from the GoM to approve the Rs 500-crore investment for the SPV.
The GoM was to give the company boards a one-time waiver to approve the investment and the investment decisions were then to be cleared by the Cabinet Committee on Economic Affairs.Earlier this week, Dabhol-related arbitration cases in the Supreme Court were withdrawn.
The plant , will first be transferred to New Age Power Company Pvt Ltd, an SPV floated by GE and Bechtel, and then to Ratnagiri Gas and Power Pvt Ltd. Once the asset transfer is complete, RGPPL will undertake construction and commissioning activities of the power plant.