Tatas, BSES show interest

By Our Special Correspondent

MUMBAI, NOV. 12. Tata Power and BSES expressed deep interest to purchase 85 per cent shareholding of Dabhol Power Company (DPC) held by erstwhile Enron and its associates and they would conduct due diligence of the project, after signing a confidentiality agreement with DPC.

However, this is subject to certain conditions, inter-alia, on the price of shares and other related technical and operational issues. ``It is expected that further steps would be initiated by DPC, BSES and Tata Power in the next few days to begin the process of due diligence. The sale price of the shareholding of Enron and its associates in DPC would be decided by the parties concerned, through mutual negotiations,'' IDBI today stated in a press release here.

IDBI led lenders, Indian financial institutions (IFIs) including ICICI and SBI held discussions with DPC, BSES and Tata Power on November 8 and 9, last week, in Singapore ``to ensure quick resolution of all issues and facilitate sale of shareholding by Enron or its successors, to one of the new sponsors at the earliest.'' IDBI further stated that the agreed road map should result in early solution of the complex issues in the project.

The issues discussed at the meeting included completion of Phase- II of the project and the cost thereof, sale of shareholding by Enron Corp., Bechtel Enterprises, and General Electric in DPC aggregating 85 per cent of total capital to either of the prospective new sponsors, namely, BSES and Tata Power.

Earlier, at the meetings convened by the Central Government, it was decided that the Government, IFIs and the Government of Maharashtra could consider certain incentives to the prospective new sponsors with a view to making the project more attractive as also to bring down the tariff to a reasonable level, to ensure continued viability of the project.

At the meeting in Singapore both the prospective sponsors discussed in detail with IFIs as well as Enron, several issues relating to the project which would have an impact on the pricing of the shares. Towards this end, brief features of the incentive package prepared by a Committee appointed by Government of India, for the purpose, were discussed. The officials of Enron also clarified various technical and operational issues, which would need to be resolved for smooth transfer of management and successful operation of the plant by the new sponsors.

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