By Apurva Bhatt

The Maharashtra cabinet last week approved the conversion of Rs 450 crore debt of the Ratnagiri Gas and Power Private Limited (RGPPL), also called the Dabhol power plant, into equity.

A source said if not for the equity, RGPPL would have turned into a non-performing asset on bank books on March 31. "The conversion was done under pressure from bank lenders," said the source. National Thermal Power Corporation (NTPC), which along with Gas Authority of India Limited (GAIL), is the promoter of RGPPL has sought to sell the power to the Maharashtra government at Rs 4 per unit but the state government wants it at Rs 3.61 per unit. Since Maharashtra is its largest consumer (95%), RGPPL cannot begin power production unless the state decides to purchase it.