State skips promise on decision for judicial probe in Dabhol deal

Sanjay Jog

Mumbai, Aug 3: The Maharashtra government, even on the concluding day of the three-week monsoon session on Friday, skipped its promise given to the state council on taking a cabinet decision on the institution of a judicial probe into the Dabhol deal. Thanks to Enron’s recent announcement to pull out of the 2,184-mw Dabhol project.

State government sources told The Financial Express that it is to be discussed threadbare at the coordination committee of the ruling Democratic Front (DF) as well as state cabinet whether such a probe is really needed at this point of time when Enron wants to opt out of the Dabhol project. “The real issue is how much Enron is serious about its announcement and whether the Indian financial institutions are really working a package for the take over of the project,” sources added.

Sources said that state energy minister Padmasinh Patil had assured the state council on July 17 that the cabinet would take a decision on the institution of a judicial probe within a week and that he would inform the house. Dr Patil had made it clear that the decision on a judicial probe was unanimously taken by the DF coordination committee at its meeting on July 11 and said that it was not a cabinet decision.

Dr Patil on July 24 had reassured the state council that he would make an announcement with regard to judicial probe before the conclusion of monsoon session of the state legislature. The opposition Shiv Sena-BJP alliance was keen to know the terms of reference to be fixed for the proposed judicial commission.

State chief minister Vilasrao Deshmukh, after the coordination committee meeting, had said that terms of reference of the commission, which is to be set up under the Commissions of Inquiry Act, would be decided at the coordination committee level before August 11. Ironically, Mr Deshmukh had refrained from giving specific nature of the inquiry and in what connection it would be done.

Sources said that Enron’s pull out offer has changed the equations now in the state as what is more important is whether the US multinational would press for arbitration or recover its equity and go away. Furthermore, it is also to be watched how the off-shore lenders whose funds are insured will make attempts to recover their finances some of which have been guaranteed by the domestic FIs. Moreover, the Supreme Court will hold hearing on a special leave petition filed by the Dabhol Power Company on August 6 challenging the Mumbai High Court order on the jurisdiction of Maharashtra Electricity Regulatory Commission to adjudicate upon dispute and difference.

Meanwhile, the anti-Enron lobby led by Pradyumna Kaul told The Financial Express that it would press for the judicial probe and said that it has already submitted a draft terms of reference to the state government. “The guilty should be punished, responsibility to be fixed on the persons and agencies involved at various states and the probe should also look into the aspect of lack of governance at various stages pointed out by the Madhav Godbole committee,” he added.

Mr Kaul said that the chief minister assured that the decision on the judicial probe as well as on its terms of reference would be taken before August 11.