MSEB defends its stand of not paying December bill to DPC

Sanjay Jog

Mumbai, April 16: THE Maharashtra State Electricity Board (MSEB) has justified its decision of not paying the December bill of Rs 102 crore to the Dabhol Power Company. Simultaneously, it has stuck to its claim over the recovery of rebate (penalty) of Rs 401 crore from the DPC for the misdeclaration and default on the availability of power on January 28.

The MSEB would soon send its opinion in this regard to the Centre. The DPC has also served the arbitration notice to the state government and the MSEB.

MSEB sources told The Financial Express the DPC should set off the December bill against the rebate amount of Rs 402 crore. MSEB has substantiated its stand by the Attorney General’s opinion in its support.
MSEB sources said that the it was entitled to pay the December bill. However, during the extended period allowed by the DPC for its payment the latter defaulted and thus “there is a recovery on DPC.”

The sources said the DPC has cited instances and clauses of power purchase agreement (PPA) whereby the December payment is a must. According to the DPC notice, on or about January 5, 2001, it delivered a monthly billing statement to the MSEB prepared in accordance with clause 11 of the PPA and relating to the month of December 2000, in terms of which the sum of Rs 159.86 crore became due to the MSEB upon that date in accordance with the PPA provisions. The sum of Rs 159.86 crore accordingly became payable to the DPC on January 25, 2001 in accordance with the provisions of clause 11.2 (f) of the PPA.

The sum of Rs 159.86 crore was not paid by the MSEB on the due date for payment in accordance with clause 11.2 (f) of the PPA on January 25, 2001. On or about February 6, 2001, the DPC made demand upon the MSEB for the payment of Rs 152.86 crore in respect of the December bill pursuant to the provisions of the Government of Maharashtra (GoM) guarantee.

The MSEB failed to pay the bill amount of Rs 152.86 crore (the MSEB had disputed the bill amount of Rs 159.86 crore and this it was corrected at Rs 152.86 crore) on the due date in accordance with clause 1 of the GoM guarantee on February 13, 2001.

On or about February 23, 2001, the MSEB paid the sum of Rs 50.86 crore of the total Rs 152.86 crore to the DPC towards the December bill.

Accordingly, the MSEB remains indebted to the DPC in the sum of Rs 102 crore. By a letter of February 28, 2001 the MSEB admitted that Rs 102 crore was then due and owed by it to the DPC in terms of the December bill. “MSEB has not since sought to dispute this sum,” DPC notice said.