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BSES moves ministry over Enron's stake in DPC

S Ravindran

After a series of flip flops, power major BSES has formally communicated to the Union government that it is interested in buying out Enron's stake in the Dabhol Power Company (DPC).

It has, however, added the now-familiar rider that the capital cost of the project should be brought down.

BSES chairman and managing director R V Shahi said, "We have formally told the ministries of power, finance and financial institutions Industrial Development Bank of India, ICICI and the State Bank of India that we are interested in the project. The communication was despatched last Saturday."

Shahi also said that a financial re-engineering of the $3 billion, 2,184-mw power project was necessary so that the cost of power was affordable.

Analysts, however, queried the seriousness of BSES's intentions in view of the various conflicting statements made earlier by Shahi.

He has made public statements that the company is interested in the project but has denied them in communications to the Bombay Stock Exchange.

Sources familiar with an earlier round of discussions with Enron say that BSES had offered to buy the equity at a 90 per cent discount.

This would have meant BSES paying only around $120 million for the 85 per cent stake that Enron and its two US partners-- General Electric and Bechtel-- hold in the company. The three partners have so far invested around $1.2 billion in the project.

Tata Power managing director Adi J Engineer insisted that the company was still interested in the Dabhol project. "We have not held any serious discussions on the issue in the last fortnight but discussions will resume shortly. There is no roadblock and the final outcome will depend upon the sacrifices willing to be made by all the stokeholders in the project," he said. Engineer refused to divulge further details.

The lenders to the project have mooted a three-pronged formula for the sale of power from the Dabhol power project. The entire power from the 740-mw first phase of the project should be bought by the Maharashtra State Electricity Board.

Half the power from the 1,444-mw second phase will be bought by the central government utility, National Thermal Power Corporation, while the other half will be sold within Maharahstra for which a dedicated region will be allotted to Tata Power.

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