The Centre has proposed a host of concessions to enable speedy revival of the troubled Dabhol project. The Centre would waive custom dues of Rs 324 crore, accord it mega power project status, provide benefits under the integrated LNG policy, waive the excise duty of naphtha, confirm the availability of the benefit under section 80IA of the Income Tax 1961 even after the transfer of assets to the new owner.The BJP-led government, which had provided a counter-guarantee during its 13-day government in 1996, would enter into an agreement with the now-fallen Dabhol Power Company (DPC), confirming priority status at which consents and permits of DPC would be transferred to the new owner. The Centre would enter into an agreement with DPC confirming the priority status on which right of way (RoW) for gas transmission lines would be granted to the new Dabhol. The Union Cabinet, expected to meet next week, is likely to give its consent for the sops.Similarly, the Congress-led government in Maharashtra would offer transmission and wheeling charges for inter-State sales of electricity, stamp duty for the sale of assets of the project, sales tax on the purchase of equipment for completion of the project and on the purchase of naphtha, electricity charges till the completion of construction and local taxes and land revenue dues. The cash-strapped Maharashtra State Electricity Board (MSEB) would pay Rs 136 crore under letter of credit for power charges in respect of power already utilised by MSEB but not paid for an account of litigation. Further to the extent of payments that are due to the DPC in respect of power purchased in the past and not covered by the proceeds of the letter of credit, the Maharashtra government would effect the payment of the same. “Opic (the US-government promoted Overseas Private Investment Corporation) is in the process of finalisation of the process of selection of a sponsor for the project and they are expected to complete this process by January 31, 2004. Prior to this, it would be necessary for Government of India (GoI) to finalise the restructuring regarding concessions sought from it under the restructuring framework. At this stage, in principle approval would need to be indicated by GoI,” says Pradeep Deb, joint secretary at the ministry of finance in an internal departmental note. According to Deb, the Indian lenders, led by IDBI with a total exposure of over Rs 6,200 crore in the beleaguered Dabhol project, would buy out the debt of the offshore lenders. The process in this regard has already been started. Opic, which visited India during January 13 and 15, would lead the effort to locate a new sponsor for the project.
