General Electric International Inc has not responded to the government’s proposal to restart Phase-I of the Dabhol power project without any conditions.Highly placed government sources said that General Electric is insisting on payment of $72.6 million towards contractual claims along with an in-principle agreement with Industrial Development bank of India on recovery of its 10 per cent equity investment in Dabhol power project, before it submits a restart plan for Dabhol Phase-I project.The ministry of finance has now convened a meeting on December 26 with the ministry of power, General Electric and Industrial Development bank of India (IDBI) to look into the issues with regard to the resumption of Dabhol phase-I (658 mw).Sources said that General Electric wants fulfilment of its conditions before it submits a restart plan for Dabhol Phase-I project or even before it conducts a 10-day, on-site analysis of the plant, as desired by financial institutions and the Centre.“GE has dropped sufficient indications in this regard despite ministry of power’s directives that it would have to keep aside issues related to settlement of equity and settlement of its dues with DPC,” the official said.The ministry of power at a meeting convened on December 2 with GE, IDBI, Maharashtra State Electricity Board (MSEB), Central Electricity Authority (CEA), National Thermal Power Corporation (NTPC) had made it sufficiently clear that GE’s conditions on recovery of dues and equity cannot be entertained at this point of time when the priority was given for expediting the resumption of Dabhol phase-I generation.In fact, Union power secretary R. V. Shahi had asked General Electric to submit a detailed proposal to restart phase-I excluding its claims. However, according to the Central government sources, GE has yet to submit it to the ministry of power.Sources said that GE’s chief executive officer and president Scott Bayman, in a recent communication to IDBI, has categorically stated that before it commences the 10-day, on-site analysis of the power plant (at a flat fee of $200,000), “It requires payment of full of $72,600,000 representing GR contractor claims for work related to Dabhol project and an agreement in principle with respect to settlement of GE’s equity investment in Dabhol project.”Sources said that even IDBI seems to have already turned down these conditions and has shown its reluctance to make commitments towards settlement of equity investment or flat fee. The issues will not be discussed at the December 26 meeting, sources said.GE has also forwarded a draft of the “services proposal between GE International Inc and IDBI for appraisal of seller supplied equipment at Dabhol phase-I ( 1 X 109 FA plus 1 X 600 1B) and phase-II ( 2 X 109 FA)”. These works would be conducted by GE at a flat fee of $200,000 provided financial institutions agree to GE’s demands of first settling its claims.
