Indian lenders to meet GE-Bechtel today in London

Mumbai, March 28 | Updated: Mar 29 2005, 05:35am hrs
The Indian lenders to the Dabhol project will have one more meeting with GE-Bechtel for the settlement of the latters non-debt claims of $420 million. The meeting is scheduled for Tuesday in London.

Institutional sources told FE, the Indian lenders, led by IDBIs executive director Jatinder Balakrishnan, will make another attempt to arrive at an agreement with GE-Bechtel for the settlement of non-debt claims. So far there has not been any pact as the March 18 meeting held at Washington failed to make any headways. Even the meeting held earlier in January in New York had failed.

The Indian lenders have offered to settle the non-debt claims at $220 million. Meanwhile, GE-Bechtel have made a counter offer of $290 million. Sources recalled that at the initial stages of negotiations GE-Bechtel combine was pressing for the payment of entire dues of $420 million comprising contractual claims of $140 million.

Sources admitted that the delays in arriving at an agreement with GE-Bechtel may collapse the schedule for the revival of Dabhol phase-I (658 mw) which has been closed since May 29, 2001 after Maharashtra State Electricity Board suspended power purchase from the Dabhol Power Company. The Centre has hinted at the re-start of phase-I in the middle of 2006.

The agreement with GE-Bechtel combine will pave the way for the Indian lenders to float a special purpose vehicle to take over the offshore debt. The Indian and offshore lenders have already reached at a settlement for the dedollarisation of debt, sources noted.