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MSEB not to pay Rs 1.40 billion May bill

Maharashtra State Electricity Board has decided not to pay Enron-promoted Dabhol Power Company's Rs 1.40 billion bill for May, 2001, and instead said the amount would be adjusted in its proposed penalty of around Rs 4 billion, soon to be slapped on the multinational.

"There is no question of MSEB making the payment. In fact, DPC will have to pay us after adjusting the amount due to the forthcoming four-monthly penalty," a senior state government official said in Bombay on Tuesday.

He said since MSEB had already rescinded the power purchase agreement signed with DPC, it was no longer interested in making the payment.

"If DPC agrees to de-recognise the PPA and accepts our offer to continue supply without the agreement, MSEB would certainly draw the required power and also pay the respective bills," the official said.

He said, "everything cannot be played according to biased rules. First they refused our payment only to demand it the very next day...so now MSEB has decided not to pay at all."

Earlier, when MSEB had issued a cheque worth Rs 1.34 billion towards the April bill, DPC had refused to accept the same saying it would not take any 'protest payments'.

The official said if that was the case then MSEB would take a stand by saying that it would pay the ensuing bills 'under protest'.

From May 29 onwards MSEB stopped drawing power from DPC as the US energy major had made it clear that if the loss-making board wished to continue its purchase, it would have to recognise the PPA.

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