Enron serves termination notice

By Arunkumar Bhatt

MUMBAI, MAY 19. The Dabhol Power Company, an Enron-sponsored firm, today served what it called a preliminary termination notice (PTN) on the Maharashtra State Electricity Board for scrapping the power purchase agreement between the two.

The move comes a couple of days before the lenders of the $2.9- billion power project decide on the question of allowing the DPC to begin the termination proceedings.

Enron had maintained a studied silence on the prospects of further talks with the renegotiating committee after the first meeting on May 11 last. The second meeting is scheduled for May 23 and Enron is yet to decide on attending it.

In a statement, the DPC blamed the ``unwillingness of the MSEB and the Maharashtra Government to honour their offtake commitments and that of the Centre to assist the State'' but kept its options of renegotiations open.

``As a final note, even though it was necessary to issue the PTN, we are still open to constructive discussion on solutions,'' the statement said. It suggested that a solution could be either the MSEB buying the power according to the contract or finding another ``creditworthy'' buyer.

With this, the company which was supposed to come out with its own proposal in the wake of the Godbole Committee finding errors of omissions and commissions in the PPA, is now putting the onus on the MSEB, the Maharashtra and the Central Governments and that too within the framework of the existing PPA.

While blaming the Indian side for the PTN, the DPCsaid this would continue and expected the buyers to meet their obligations.

This means the company rejects the penalty notices for Rs. 402 crores slapped by the MSEB for not supplying power according to the contract.

Four groups of trans-national financial institutions and the Indian lenders, IDBI and ICICI, are to decide the matter by voting through fax or e-mail on Monday.

PTI reports:

The State Government and the MSEB may be required to cough up about Rs. 17,000 crores in damages to the DPC if the PTN ends in a final one after six months, an official said.

Send this article to Friends by E-Mail

Section  : Front Page
Previous : Return to NDA, MPs tell Mamata
Next     : Shanmugham to head Pondy Govt. again