US multinationals Bechtel and GE on Monday said they are ready to restart the Dabhol power project and also offered a proposal to break the stalemate in negotiations that had led the project to shut down operations in June 2001. The two companies have asserted that separating the commercial relationship and equity claims is the best way to expedite the efforts necessary to restart the plant. In a letter responding to offers made by Rothschild’s, the firm advising Indian FIs on settling claims, GE and Bechtel proposed three steps to break the deadlock in negotiations. THE DPC MESSs MUMBAI: The 2,184 MW power project, commissioned on May 13, 1999, has been idle since June 2001 when a dispute between DPC and MSEB, its sole customer, shut it down. The $3 billion project has not been generating any revenues since then, and started defaulting on interest payments to banks since September 2001.(ENS) GE and Bechtel which own 10 per cent stake each in Dabhol had filed arbitration against the Union government on September 22, under the arbitration rules of the United Nations. They have made a claim of $1,200 million in a bid to recover their investments worth $120 million each in Dabhol. While collapsed Enron holds 65 per cent in Dabhol, MSEB owns 15 per cent stake. They said that there should be a separation between the outstanding unpaid contractor claims relating to the project from the equity claims to expedite negotiations and restart the plant. The outstanding of the contractor claims must be settled on an equitable commercial basis and the two companies’ equity claims be resolved through the contractual remedies of independent binding arbitration without judicial or other interference. The letter has been given to a committee which consists of senior directors from IDBI, SBI and ICICI. The letter said ‘as an act of good faith, the companies will not make a prior resolution of equity claims a requirement for their support of the restart and completion of a ‘new Dabhol’. The companies also indicated that the disputes related to equity would be pursued separately and in parallel with commercial efforts to restart the plant. The equity issues would be resolved between GE/Bechtel, the Union and Maharashtra governments in arbitration as originally intended and as provided by the project agreements or by negotiated settlement.
