The Hindu : DPC restart: SC asks GE, Bechtel to respond

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Wednesday, Dec 03, 2003

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DPC restart: SC asks GE, Bechtel to respond

NEW DELHI DEC. 2. To elicit responses of two key shareholders in Dabhol Power Corporation (DPC) in the restart of the power plant, the Supreme Court today made subsidiaries of GE and Bechtel as necessary parties in the petition filed by DPC against the Maharashtra Electricity Board (MSEB).

A Bench comprising Justice Y. K. Sabharwal and Justice D. M. Dharmadhikari also asked them to respond to suggestions about fixing interim tariff for sale of electricity by DPC to the MSEB.

After the U.S. power major Enron pulled out of the project, the entire venture went into litigation leading to the closure of the power plant almost 24 months ago.

The companies impleaded as parties were GE subsidiary, Capital India Power Mauritius, and Bechtel subsidiary, Energy Enterprise, and were asked to tell the court about their response to the plant going back into operation. Observing that "prima facie we are also of the opinion that it is in everybody's interest that the plant starts functioning again,'' the bench had said it would consider the issue of fixing the interim tariff at which the MSEB should buy power from DPC. DPC, in its petition, had objected to MSEB's decision to approach MERC on fixation of interim tariff saying the apex court had passed a consent order that none of the parties would approach either the Maharashtra Electricity Regulatory Commission (MERC) or the Tribunal on their dispute over the power purchase agreement (PPA).

Senior advocate Harish Salve appearing for the financial institutions led by IDBI contended that they were interested in getting the plant back on its feet as they wanted to recover their investment which was nearly Rs. 6,500 crores forming over 70 per cent of the total cost of the project.

Meanwhile, the Union Government filed an application and the Attorney General, Soli J. Sorabjee, contended that it should be impleaded as a party in the matter.

Enron opposed the move by the Centre but Mr. Sorabjee contended that the Union Government was a necessary party as it had given the counter guarantee on behalf of the Maharashtra Government. The court gave two weeks time to the subsidiaries of GE and Bechtel, each holding 10 per cent of the shares in the DPC and asking for recovery of their investments in DPC before extending cooperation for restarting the plant, to make their views known. Other parties present before the court, including DPC shareholder Enron and financial institution IDBI, have already given their consent for restarting the plant. — PTI

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