Mumbai: The Enron-promoted Dabhol Power Company (DPC) has served an asset-transfer notice to the Maharashtra State Electricity Board (MSEB). The notice formally sets in motion the valuation process of DPCs assets in connection with the termination of the power purchase agreement.
It is considered that DPC would serve a final terminal notice any time after 19 November. DPC had served the first preliminary termination notice to the MSEB on 19 May, and the six-month period expires on 19 November. DPC has said in a statement: Following the transfer notice, the final termination notice was likely to be served in the near future to continue the legal process against the MSEB.
Says MSEB chairman Vinay Bansal: We expected it. The MSEB will not take cognisance of this notice as the PPA has been rescinded by us six months ago. Says the DPC spokesperson: Consequently, the company is left with little choice other than to serve the transfer notice to the MSEB, which draws us closer to final termination of the PPA and the ultimate recovery of damages as allowed under the project documents.
He says the notice follows more than two years of late payments and defaults in payments from the MSEB and a repudiation of the PPA by the board. An independent expert would be appointed to value the assets of the $3-billion power plant, including its 5-million-tonne liquefied natural gas facility located in the state.
DPC, the spokesman says, would still prefer to resolve this dispute amicably through a negotiated purchase by the Government of India and Indian financial institutions of the foreign sponsors equity, including offshore lenders debt. However, the ongoing discussions between DPC and the Indian government are yielding no significant progress towards a fair and reasonable solution.
In the meantime, reports hint that a meeting is likely to be held in Singapore on 8 and 9 November. Enron officials, domestic financial institutions, representatives of the union finance ministry and the bidders for the Enron stake are expected to attend the meeting.