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Dabhol issues 2 preliminary termination notices to MSEB

Our Bureau

MUMBAI, Sept. 17

DABHOL Power Company today confirmed that it has issued two new Preliminary Termination Notices (PTNs) to the Maharashtra State Electricity Board (MSEB).

One of the PTNs is for non-payment of dues for April (Rs 136 crore), May (Rs 143 crore) and June (Rs 102 crore) bills as per clause 17.2 (a) of the power purchase agreement (PPA) while the other deals with repudiation of the PPA by the board, as per clau se 17 (c) of the PPA.

MSEB had rescinded the PPA on May 23, 2001 to which DPC has not yet given its consent. The PTNs were issued on September 10.

The company has said this step, which continues the process of terminating the PPA, was necessary to ``protect the interests of Dabhol's sponsors and other stakeholders.''

DPC has criticised steps for resolving the ongoing dispute between the company and MSEB such as the Godbole renegotiating committee and the `roadmap' prepared by Indian financial institutions.

``(The above) have clearly resulted in unrealistic and illogical suggestions that will not solve the Dabhol issue and only raise questions whether India is a safe and reliable, not to mention attractive, destination for foreign investment, especially in the power sector,'' Mr Jimmy Mogal, DPC spokesperson said in a company statement here.

The statement further says: ``Not only have Enron, Bechtel and GE reached this conclusion, but this delay without progress by MSEB, the Government of Maharashtra and the Government of India is impacting other stakeholders in the project.''

According to the company spokesperson, foreign lenders to the project have stopped disbursement of funds for the Care and Preservation (C&P) of the plant.

The company had also invoked the State Government guarantee for April dues on September 4 and subsequently invoked the Government of India guarantee on September 11 for the same amount. DPC had refused to accept Rs 136 crore from MSEB as April bill payme nts made ``under protest,'' in May.

Parallel to these developments, DPC had also, through Bank of America, approached the Mumbai High Court for invoking the letter of credit for the same amount.

The company had earlier, on May 19, issued two PTNs for non-payment of dues under clause 17 (a) of the PPA for the December 2000 and January 2001 bills totaling Rs 213 crore.

According to the clause, the company can issue a PTN for ``non-payment of dues in excess of anything above $1,00,000.''