GAIL keen to take stake in DPC
By Our Special Correspondent
NEW DELHI, JAN. 1. For the first time a public sector enterprise has expressed interest in taking up 85 per cent equity in the collapsed Enron Corporation promoted Dabhol Power Company (DPC) in Maharashtra. The Gas Authority of India Ltd. (GAIL) today announced that it had communicated its ``expression of interest'' to the lead Indian financier of DPC, the Industrial Development Bank of India (IDBI), to the minority stakeholder the Maharashtra State Electricity Board (MSEB) and to DPC itself for taking equity in the project. The 85 per cent equity being sought involves 65 per cent of Enron and 10 per cent each of Bechtel and GE.
GAIL has also indicated that its equity stake might involve a strategic partner. The organisation also made it clear that it was communicating its interest after clearance from its parent Ministry, the Ministry of Petroleum and Natural Gas for conducting due diligence study and for signing confidentiality agreements with the parties concerned. GAIL has also appointed international consultants KPMG for carrying out the due diligence process. If GAIL finally picks up the equity in DPC, it would be its second foray into the power sector. It has already taken equity in Gujarat State Energy Generation, a company promoted by the Gujarat State Petroleum Corporation, for its 156.1 MW combined cycle gas-based power project at Hazira. In case of DPC, GAIL is also interested in the liquefied natural gas (LNG) import and regassification facilities, apart from the main power plant for which it intends to look for a strategic partner.
During it dispute with the MSEB concerning DPC, the Enron Corporation had put considerable pressure on the Central Government to involve one of its public sector units, especially the National Thermal Power Corporation, to pick up its share of equity at that too at the original cost of Rs. 120 crroes. After the collapse of Enron, the equity price is likely to go down substantially.
With GAIL putting in its expression of interest, there are now three likely purchasers of Enron's equity in DPC. The others are the Tatas and the Reliance group.
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