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MSEB to slap termination notice on DPC, if things go beyond control

The Maharashtra State Electricity Board will not hesitate to issue a termination notice to its partner, the US energy major Enron-promoted Dabhol Power Company "if things go beyond one's control" following the company's board meeting in London last week.

"In fact, MSEB chairman Vinay Bansal informed the DPC directors during the April 25 London meet that MSEB could also do the same (termination of the power purchase agreement) if DPC does not comply with its contractual agreements," a company director, who attended the meeting, said.

As per section 17.3 b (i) clause of the PPA, MSEB too can pull the carpet beneath DPC's feet, in the wake of the resolution passed by DPC shareholders for winding up the $3-billion power project in Dabhol, Maharashtra, he said.

At the meeting, where tempers soared high, Bansal put forth the loss-making board's grievances including DPC's refusal to even recognise, let alone pay, the Rs 4.01-billion penalty slapped on it on account of inability to supply power on demand, he said.

The director informed that Bansal and the Indian financial institutions' representative tried to convince the irked members of Enron, GE and Bechtel to resolve the issue over a renegotiation table rather than taking such a harsh decision.

"It is better to resolve grievances amicably. After all the nation's prestige is at stake," the director said.

When contacted Bansal refused to divulge the details of the London meeting and said: "We have tried our best, the ball is now in DPC's court."

It was the Indian FIs' representative, who tried his optimum best to convince Enron India managing director K Wade Cline and DPC president Neil McGregor not to take up the termination notice issue, but, was defeated by a one versus seven vote, the director added.

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