Dabhol power project may turn into bad debt

The Dabhol power project may turn into a non-performing asset -or a bad loan for bankers - after it defaulted in clearing its dues to lenders, who have refused to either lend more or accept a government proposal to convert their debt into equity. The project has been lying idle since December as its gas supply has come to a halt, resulting in no revenues to pay monthly installments on bank loans, estimated at close to Rs 8,500 crore. The bankers have taken the difficult step after the project failed to pay its installment for June, estimated at about Rs 108 crore.