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May 9, 2001
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Money > PTI > Report May 9, 2001 |
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Govt refuses escrow cover, hike in LC limit for EnronThe Union finance ministry has upheld Maharashtra government's decision not to provide escrow cover and increase the limit under letter of credit to Enron promoted Dabhol Power Company as per the demand of the energy major's global and domestic lenders last week. In the reply, sent to the lenders including IDBI on Tuesday, the ministry has communicated the state government's refusal to 'tow the line' to an array of 'diktats' put forward by them to Union finance secretary, Ajit Kumar, state government sources said. A copy of the reply was faxed to the state government this afternoon, they said. "We are pleased to note that the Centre has upheld our view and let justice prevail," a senior bureaucrat said. In a letter dated May 1 to Kumar, the consortium of banks -- ABN Amro, Credit Suisse First Boston, Citibank N A, ANZ Export Finance Ltd and Bank of America and IDBI -- had asked for payment of the disputed Rs 2.13 billion December and January bills, an escrow cover, increase in the letter of credit amount and 'henceforth' honour the counter guarantees and its obligations in the power purchase agreement. The Centre has also reiterated the state government's strong exception over non-payment of December and January bills of Rs 2.13 billion as it had opted for resolving by way of arbitration, the process for which would be begin soon in London. Meanwhile, the state appointed Singapore-based lawyer Quentin Loh as its representative for the three arbitration cases and MSEB would be represented by former Bombay high court judge M L Pendse. YOU MAY ALSO WANT TO READ:
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