A Committee of Secretaries late last month decided that the lenders will bear a total of Rs 921 crore (Rs 9.21 billion) out of the Rs 1,494 crore (Rs 14.94 billion) escalation in completion cost of the power project and the adjacent liquefied natural gas facility.
Official sources said the CoS did not entertain the demand of Ratnagiri Gas and Power Pvt Ltd, the joint venture of NTPC and GAIL that owns the 2,150 MW power plant, to ask lenders to bear Rs 573 crore (Rs 5.73 billion) as additional costs on account of items such as service tax, insurance and fuel expenses.
The original estimate for completing the project was Rs 870 crore (Rs 8.7 billion) when RGPPL took over the Dabhol plant in 2005. In September 2007, the company put the completion cost at Rs 1,960 crore (Rs 19.60 billion) at a meeting of the Empowered Group of Ministers looking into the issue.
For meeting the cost escalation, GAIL and NTPC had agreed to invest Rs 475 crore (Rs 4.75 billion) additional equity each, while Maharashtra state electricity utility was to pay Rs 250 crore (Rs 2.5 billion). The remaining was to be borne by lenders.
In December 2007, RGPPL told the CoS that the completion would now require Rs 2,364 crore (Rs 23.64 billion). Sources said lenders, who included IDBI Bank and ICICI Bank, argued that RGPPL should have a firm view of the completion cost and the company should not be allowed to perennially increase the revival cost.
The CoS decided to limit lenders' share in the increased cost at Rs 455 crore (Rs 4.55 billion), and said any further cost escalation would be borne by RGPPL, NTPC and GAIL.
