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Lenders to give proposal to restart Dabhol plant

By Our Special Correspondent

MUMBAI SEPT. 27. A proposal to restart the Enron-owned Dabhol Power Company (DPC) would be submitted by the Indian lenders to the political risk insurer, the Overseas Private Investment Corporation (OPIC), an agency of the U.S. Government by October 13, said the IDBI Chairman and Managing Director, P. P. Vora here today.

"Lenders will be submitting a final proposal to restart the power project to OPIC by October 13,'' Mr. Vora said while speaking to media persons on the sidelines of the FICCI conference on "Indian Banking: Global Benchmarks 2003.'' This would be worked out keeping the interest of all stakeholders in the project in mind, he added.

Recently an independent U.S. arbitration panel has ruled unanimously that General Electric (GE) and Bechtel's interests in the DPC were improperly expropriated by the Indian Government. The Tribunal ordered a binding award of $28.57 million each to GE and Bechtel for claims they brought against their political risk insurer, OPIC. GE and Bechtel each hold 10 per cent equity interest in the $3 billion Dabhol Power Plant, idle for more than two years.

According to Mr.Vora the power from DPC would be made available at a reasonable price once all the lenders agree on a mode of action. He further said that arbitration by GE and Bechtel would not be an issue once all stakeholders agree to a proposal across the table. According to him arbitration is an independent activity and it will not affect negotiation.

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