Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel
June 4, 2001
|
|
|
|
|
|
||
|
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Wedding | Women Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel |
||
|
|
||
|
Home >
Money > Business Headlines > Report June 4, 2001 |
Feedback
|
|
|
DPC lenders' engineers push for phase II completionBS Banking Bureau Stone and Webster, lenders' engineers to the Dabhol power project, is pushing for completion of phase II without time and cost over-runs. The firm will make a formal presentation to the global lenders of the Dabhol Power Corporation in Singapore on Monday on the technical aspects of the plant, with White & Case, the New York-based legal firm dealing with the legal implications of mothballing the project. The global lenders to the project are meeting in Singapore for two days in a last-ditch attempt to keep the project afloat. The meetings will discuss the finer aspects of "sacrifices" to be made by the equity and debt stakeholders of the company. While DPC is ready to cut the tariff and the internal rate of return, the lenders are willing to cut the interest costs, stretch the maturity period of loans and raise the moratorium on repayment. Cash-strapped Maharashtra State Electricity Board is likely to be allowed to issue bonds to DPC, thereby deferring payments. "The feasibility of adopting the securitisation route will also be explored to bail out MSEB," a source said. Both the Indian and global lenders are pitching for speedy completion of the project. With both the phases operational, DPC can avoid the embarrassment of delay in generating power "cold-start," "Going by the terms of the power purchase agreement, both the plants cannot be shut at the same time," said a source. The likely cost over-run -- about 30 per cent ($450 million) -- will be capitalised. Repayment for phase II, which is slated to commence in 2002, may only start in 2003, thereby raising the moratorium on loan repayment by one year. The loan amount will go up to the extent of the installment slated to be cleared in one year. "The foreign lenders are not adverse to supporting the Indian lenders on the issue of project completion. Collectively, they will try to convince DPC against putting phase II in cold storage," said a source. The Indian government is likely to approach the US Exim and J-Exim to persuade them against invoking the accelerable guarantee clause, shielding the Indian lenders. ICICI executive director S Mukerjee and IDBI executive director R S Agarwal left for Singapore on Sunday morning, while State Bank of India will be represented by its Singapore office CEO at the meeting. On the eve of his departure, Agarwal told Business Standard that the financial institutions would take up the issue of MSEB slapping a termination notice on DPC. He added: "We can understand MSEB's viewpoint because they cannot absorb the power from phase II." The state electricity board is seeking intervention of the Centre in the issue. Powered by YOU MAY ALSO WANT TO READ:
|
||||
