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Construction to resume after final DPC verdict

US energy major Enron's Dabhol Power Company on Thursday reiterated that a decision on recommencing construction of its power project's 1,444 mw phase II will be taken only 'after various issues in relation to it (project) are resolved with finality'.

"We wish to set the cord straight that Enron Corporation chairman Kenneth Lay has not agreed to any such proposal to complete construction of the project's phase II as suggested in some sections of the press", DPC said in a statement in Bombay.

It said any discussions that Lay had on recommencing the construction of the $3 billion project's phase II was in the context of the uncertainties surrounding the project.

DPC said the project contractors had resorted to termination due to non-payment of their dues, as the lenders had stopped disbursing funds.

"This decision was taken as a result of continuing defaults by Maharashtra State Electricity Board, repudiation of the power purchase agreement, failure to pay outstanding invoices and stated unwillingness to accept phase-II power," it said.

The construction work was stalled also because of the governmental guarantors' failure to honour their payment guarantees, it added.

"This situation has not changed", DPC said.

On Wednesday the state government had announced a judicial probe into the Enron agreement which was dubbed as 'unfortunate' by the multinational.

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