The Maharashtra government is set to file cases against Bechtel for polluting the water bodies around the Dabhol Power Company plant owing to leakages from the plant premises.

The company has so far refused to come to the negotiating table and has persisted with international arbitration processes in violation of a Mumbai high court stay order.

This is part of the government's two-pronged plan to finalise the revival plans of the defunct Dabhol Power Company plant. Another prong is buying out a stake in DPC through Maharashtra State Electricity Board.

A well-placed government official said: "Both Maharashtra Pollution Control Board and an independent Australian agency have conducted a pollution probe and confirmed Bechtel's liability in polluting the water bodies around the DPC plant. We will shortly file cases agains the firm in this regard."

The government strategy involves filing cases against Bechtel for polluting water bodies located around the DPC plant in a bid to get them on the negotiating table.

The other lead promoter of DPC, GE has already agreed to the revival plan in principle and withdrawn itself from the international arbitration proceedings before the London and Paris courts where Bechtel continues to litigate seeking compensation from the Government of India, Government of Maharashtra and the Maharashtra Power Development Corporation Limited to recover its financial exposure to the DPC project.

The Union Government hopes to tie up the financial buyout package for GE and Bechtel's stake in the DPC project prior to the commencement of the arbitration hearings scheduled before a London court in mid-July.

Already the state government has initiated contempt of court proceedings against Bechtel and Enron before the Mumbai high court that had stayed any such international arbitration till the case before it had been decided.

The Maharashtra government had made it clear that it would be willing to only purchase the power generated from a revived phase I and II (after completion) of the DPC project at the rate of Rs 2.30 per unit.

This has now been conceded by Indian financial institutions that are currently working out the quantum hit on their respective finances that will have to be accommodated to make a revival plan possible.

A team of GE officials is also currently at the DPC plant in order to assess the amount of funds required to restart phase I of the DPC project as well as complete the unfinished portion of phase II.