Gail India Ltd is in talks with the Tata-British Petroleum consortium to jointly bid for the proposed sale of the beleaguered Dabhol Power Company's assets.
The move is a part of Gail's strategy of adding value to its existing business and foraying into power generation.
"We are talking to the Tatas and BP to join hands and bid for Dabhol. Overseas Private Investment Corporation executives are slated to come here in March. IDBI is also likely to invite a fresh expression of interest. We expect to join the consortium by then and bid for the asset sale of Dabhol," Gail executive director (planning and business development) Rajeev Khanna said in Mumbai on Friday.
This is the second time that Gail has shown interest in Dabhol. In December 2000, Gail had submitted an expression of interest.
However, the bid was called off and the earnest money of $100,000 was returned to the interested companies.
Gail is now working out a plan to connect Dabhol's liquefied natural gas terminal at Guhagarh in Maharashtra to the east coast via a pipeline.
Khanna said Gail was looking at the British Gas model of setting up a gas-based power plant. The model provides the flexibility of exiting the power plant once it is set up and running.
The three foreign promoters in Dabhol -- Enron, General Electric and Bechtel -- which hold an 85 per cent stake in the company, have decided to exit the project following a payment dispute with the Maharashtra State Electricity Board.
OPIC is both lender and political risk insurer to the project. Following the collapse of Enron, OPIC has the option of taking over Enron's 65 per cent stake in Dabhol.
Senior executives of the US government agency visited India last month and talked to Reliance and Tata, which have shown interest in the project.
