The committee, which held its maiden interaction on Wednesday with finance minister Jaswant Singh, also comprises Vijay Kelkar, economic advisor to the finance minister and Pradeep Deb, joint secretary in the finance ministry.
Offshore Lenders File $171-m Claim On Centre
Our Economic Bureau
Mumbai, Nov 6: The ongoing revival efforts for the Dabhol project on Thursday received a major jolt as the offshore banks incorporated in Austria, France, the Netherlands, Switzerland and the UK have initiated claims totalling over $171 million plus costs and expenses against the Indian government. These claims have been made against the Indian government for its failure to protect the claimants loan to the Dabhol power project following the closure of the plant in 2001.
The committee would have to address the issue of repayment and political insurance claims involving offshore lenders to the now fallen Dabhol Power Company (DPC) could be settled through the US-government promoted Overseas Private Investment Corporation route.
Secondly, the committee would have to look into the claims made by GE and Bechtel, which hold 10 per cent stakes each in the beleaguered DPC, towards construction and engineering works. GE and Bechtel have claimed over $72 million in this regard and they had terminated the construction contract with DPC since June 17, 2001, following the successive defaults by DPC towards their payments.
Thirdly, the Chandra committee would have to see that the Indian lenders, with an exposure of over Rs 6,200 crore in the troubled DPC and also their guarantee of Rs 3,000 crore in dollar terms, carry out the sale of Dabhol assets on an as-is-where-is basis. It must be mentioned here that Industrial Development Bank of India (IDBI)-led institutions have roped in NM Rothschild to prepare a comprehensive bid document for sale of Dabhol assets and also the restructuring plan.
It must also be noted that Reliance Energy Limited, the Reliance group power utility until recently known as BSES Ltd, reiterated on October 15 that it was quite keen to take over the distressed Dabhol project on an as-is-where-is basis. Besides REL, Tata Power Company-British Gas-Gas Authority of India Limited consortium is also another serious contender for taking over the project in view of the potential for furthering their interest in the LNG business.
This apart, the committee would also look into the option of drawal of Dabhol power by Maharashtra State Electricity Board (MSEB), which may not be the sole buyer. As per the provisions of Electricity Act 2003, the new buyer of Dabhol assets would be eligible for the inter state power supply after payment of wheeling charges to the MSEB.