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May 30, 2001
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Money > PTI > Report May 30, 2001 |
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DPC shuts plant, to issue termination noticeAmidst a rash of allegations and legal wrangles, US energy major Enron-promoted Dabhol Power Company has shut down the $3 billion Guhagar plant and is set to issue the termination notice to its partner MSEB. With the MSEB not drawing power since Tuesday noon, the multinational had no option but to shut down the plant as MSEB is their sole customer, a member of the Godbole committee, set up for re-negotiating the power purchase agreement with the DPC said in Bombay on Wednesday. The chairman of the state utility told reporters on Tuesday that it had stopped buying power from Dabhol effective noon. A second phase was scheduled to add 1,444 MW later this year. MSEB, which has defaulted on a $48 million payment, says it will not buy power being produced by the project's second phase, because it is too costly. "DPC is reeling under tremendous pressure from its lenders who have already given the multinational a go-ahead for a wrap up by terminating the contract," he added. He said Enron India chief K Wade Cline had conveyed DPC lenders' nod for the termination to the committee members Tuesday and had said, "we will have to terminate the contract, if no solution is found to this grave crisis. As it is, even now DPC cannot see a way out." Dabhol this month issued a notice to cancel the contract to sell power (May 19), filed for arbitration in London, and demanded the government find a buyer for the project's second phase. "Even though there exists a cushion period of six months, the energy major will issue the notice," the official said. On the other hand, MSEB officials are not worried over the termination of the contract. "MSEB has already rescinded the PPA. So even if they terminate the contract, it hardly matters to us," they said. Meanwhile, the Godbole committee would meet MSEB officials on June 6, but DPC representatives have not been invited for the same.
With additional inputs from Reuters ALSO READ:
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