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May 19, 2001
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Money > PTI > Report May 19, 2001 |
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DPC took a hurried decision, clock starts ticking now: FIs"The clock has started ticking now for the state, Centre and the Maharashtra State Electricity Board who has six months to decide either to save or terminate India's first 2,184 mw fast track power project," said sources at financial institution. "What was the need to hurry up? Maybe, it was at the behest of the Dabhol Power Company's foreign lenders, who pressurised the US energy major to issue the pre-termination notice to MSEB," FI sources said in Bombay on Saturday. "The inevitable has happened and DPC has gone ahead despite the London meeting," sources said. DPC did not wait for the voting to complete as it would have received the required mandate from the ABN-AMRO led offshore consortium, who would have communicated their decision immediately after the tele-conference that ended Friday night, they added. "This proves that DPC had already made up its mind over the PTN, but such a hasty step will not deter us (Indian lenders) to vote against the PTN," they said. Expressing doubts about further funding in view of the PTN, they said, "we have to think whether they can disburse the remaining 20 per cent funds of around $250 million following Saturday's development." DPC should have taken into account that it takes time, especially when the tariff was high, for the union government to move, as multiple agencies were involved in this $3 billion project. FI sources said they would have to meet to discuss the future course of action as there was six months time to reconsider the entire issue. "The PPA says the PTN gives time till six months or such time as extended -- this means that if one of the four groups of lenders agrees, the notice period could be extended," they said. "We have not looked at the PTN, but are sure that it will include DPC's grievances over non-payment of January bill, dishonouring of the invoked counter guarantees by both the Centre and the state government," they said. In the PTN, DPC may have said that the state's actions had adversely and materially impacted its ability to perform under its contractual agreements, they said. DPC had also convinced the foreign lenders that the state government had breached the PPA and the very fact that the government constituted the review committee indicated that it does not want to support the agreement, the sources said. The Indian lenders had tried very hard to stall the PTN notice for three consecutive days from March 15 by discussing the pros and cons of such a drastic step. "It is very unfortunate that foreign lenders and DPC fail to comprehend that they cannot harden their stand. This is not a boxing match, but a commercial dispute, which is to be solved by way of renegotiations only," the sources added. Moreover, in DPC's April 25 London board meet, an IDBI official had tried to convince the foriegn counterparts to refrain from PTN and requested DPC to resort to re-negotiation route. YOU MAY ALSO WANT TO SEE:
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