The conflict between Jindal Steel and Power (JSPL) and the Bolivian government has turned so ugly that the top management of the steel-maker, including its vice-chairman and head (global hunt), Vikrant Gujral, and director and chief financial officer (CFO), Sushil Maroo, fear entering the country even for reconciliatory dialogues.
In response to the Bolivian authorities’ invitation for a face-to-face discussion over the issues pertaining to termination of the contract, JSPL officials have sent a letter asking them to negotiate the matter over video-conference.
The company has also given the option of meeting at a neutral place like Spain, Brazil or Chile, which, according to sources in the Bolivian government, has been ruled out completely.
According to a JSPL official, ?The situation in Bolivia has become so murky that we fear that our passports may be confisticated if we go there. They (Bolivian government) have already raided our office and harassed the employees.? The official added that if the Bolivian government does not agree to meet outside the country, the company would look at resolving the issue at the international arbitration council.
The trouble between the two sides started last month when the Naveen Jindal-led private steel company terminated its $2.1-billion mining and steel venture in Bolivia over fuel supply problems. The company blamed non-investor friendly attitude of the Bolivian government for the termination of contract. According to JSPL official, the Bolivian government could not fulfill its commitment to supply 10 million standard cubic metre gas per day (MSCMD) for the plant
The Bolivian government has, however, blamed JSPL for having failed to meet its investment commitments. After the termination of the venture, it confiscated JSPL?s property and equipment at the project site in Porto Saurez and arrested two employees. It has also filed criminal cased against Gujral, Maroo and JSPL lawyer Arvind Sharma. ?A criminal case cannot be filed against anyone for not making committed levels of investment. Morerover, the investment was to be made under certain terms and conditions, which they (Bolivia) have failed to keep,? the JSPL official said refuting allegations levelled by the Bolivian government.
As per the contract, the company was supposed to invest $600 million by March 2012. The company has so far invested $92 million. The JSPL official said, it was because of the delay in land acquisition by the Bolivian government. ?About 250 hectare of land meant for the project is yet to be acquired. Then they backtracked from their gas supply agreement. It does not make business sense for us to go on investing without any contractual obligations being fulfilled,? the official said.
When contacted, Gujral confirmed the development of taking the matter for international arbitration. ?As per the contract, even after termination, the parties have 90 days to reconcile. We have time till October. If things do not work out, we will prepare a case for international arbitration,? he said.