New Delhi, December 22: The Cabinet today cleared the issuing of a counter-guarantee to the $1.3 billion Cogentrix power project, but company sources refused to comment on whether or not this meant the project was now back on the rails. For one, no details are as yet available on whether the `heat' rate on which payments to Cogentrix will be based will be the same as envisaged in the original power purchase agreement of November 1997 - this was one of Cogentrix's and China Light and Power's conditions for stepping back into the project. For another, the Karnataka Government has appointed a committee which will take six weeks to discuss whether an Escrow cover will be available for the project.Cogentrix's Ron Somers, who heads the Mangalore Power Company is in the US, and it is expected that the company will make its stand known only in a day or two.The Cabinet also approved issuance of counter-guarantee for the 420 mw IB valley project in Orissa, official sources said. The counter-guarantee for both the fast track project sare only for the foreign debt component.As part of the P C Jain committee on administrative and legal reforms' recommendations, the Cabinet also approved of repealing of 18 acts pertaining to the CTBT, taking the total number of repealed laws to a total of 300. Jain had recommended repealing of a total of 1,300 antiquated laws.The Cabinet also approved a proposal for formation of a joint venture in respect of Lagan Jute Machinery Company (LJMC) of Calcutta, a subsidiary of the Bharat Bhari Udyog Nigam, under the administrative control of the department of heavy industry.
