Although February 1 is the deadline set by the DPC for the payment of November bill, the state government is in a fix whether or not to bail out MSEB again. The Maharashtra government has already provided Rs 114 crore to MSEB in the first week of January for the payment of arrears towards DPC's October power purchase bill.

Curiously, the state government, which is currently busy organising relief operations for the earthquake-affected Gujarat government, has yet to take a decision on granting Rs 89 crore to MSEB. Ironically, the MSEB, which has paid Rs 59 crore towards the November bill before invoking the state guarantee, has expressed its inability to pay the balance amount of Rs 89 crore.

DPC spokesman Jimmy Mogal told The Financial Express that the company is quite anxiously watching the government's move. He said the DPC will decide on whether to invoke the Letter of Credit (LoC) or the counter guarantee provided by the Centre tomorrow if the government fails to make the payment.Mr Mogal made it clear that the company had invoked the state government guarantee for MSEB's non-payment of the November bills and not for arrears of Rs 159 crore towards the December power purchase bill payable on or before January 25. He said DPC has yet to recover a total of Rs 238 crore (November arrears of Rs 89 crore plus December dues of Rs 159 crore).

According to the payment obligations to DPC, if MSEB and the state government fail to make payments to DPC, the latter can make demands to the Centre. The Centre will have to make payments to DPC within 30 days. The Centre is committed to make a termination payment to DPC in case MSEB and the state government fail to make the payment. The Centre will have to make the payment by simply directing the Reserve Bank of India (RBI) to release the necessary amount from the state government's account.