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Tuesday, Jul 16, 2002

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DPC lenders meet deadlocked again

Our Bureau

MUMBAI, July 15

DISCUSSIONS between Indian lenders to the Dabhol Power Company (DPC) and US agency OPIC remained inconclusive on Monday because of "differences of opinion" between the two parties.

According to financial institutional sources, the Indian lenders have charged OPIC with undermining their interests. OPIC had been safeguarding US interests in the project instead of supporting the lenders, they said.

"They (OPIC) wear different hats as they are not only lenders to the project, but are also part of the US Government," a source said.

Indian lenders, including lead lender the Industrial Development Bank of India (IDBI), had suggested an asset sale to recover dues from the incomplete power project which has remained shut since June last year due to payment disputes between DPC and the Maharashtra State Electricity Board (MSEB).

"There is concern over who would fund the project's completion and who would take over DPC," the sources said.

The two US companies — GE and Bechtel — that continue to hold 10 per cent in the project even after promoter Enron's exit from DPC had asked for a sale of equity at $550 million.

The two parties met on Monday to discuss the details on restarting the 658-MW first phase of the power project. Indian lenders had suggested that NTPC run the project at a per unit tariff of Rs 2.50. The Maharashtra Government, on the other hand, had allowed the MSEB to buy power at Rs 2.25 per unit from the plant. IDBI had rejected the offer, saying it did not cover even interest costs.

IDBI and the other Indian lenders also discussed the price of power at Monday's meet.

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