The Hindu Business Line : Dabhol issue: Bechtel team heads to London for talks with Indian lenders

BECHTEL Corporation, which is yet to come on board on the Dabhol settlement issue, has despatched a team to London for negotiations with Indian stakeholders.

The meeting could stave off the impending arbitration proceeding slated to commence at the London Court of Arbitration on July 18.

The talks would attempt to thrash out a conclusive settlement on the financial claims and liability issues of the San Francisco-based engineering firm.

"We are certainly making progress toward a settlement of financial claims and liability issues and have sent a team to London to engage in face-to-face negotiations.

"We'll have to wait and hope they are successful," Bechtel Corporation spokesperson, Mr Jonathan Marshall, told Business Line on Friday.

A settlement by Bechtel would pave the way for the Indian lenders led by IDBI and SBI to buy out the foreign equity in the project, which would restart the $2.9-billion project in Maharashtra.

Bechtel Corporation, along with GE, holds close to 85 per cent in the 2,184-MW power project, which has been shut since 2001 following a payment dispute with its only customer — the Maharashtra State Electricity Board (MSEB).

GE had, on July 2, announced that it had reached a settlement with the Indian lenders, the Union Government and the Maharashtra Government on the dispute.

According to Government sources, the deliberations with Bechtel are in advanced stages and an agreement is expected before the case comes up at the LCA.

Government negotiators are working overtime to ensure a settlement is reached before the Prime Minister, Dr Manmohan Singh's visit to the US later this month.

According to sources, beyond the financial settlement, Bechtel had sought some third-party liability issues to be settled before arriving on a final agreement with the Indian lenders and the Government.

Among the issues, Bechtel Corporation had sought the right to argue in Court that the liability to compensate DPC's creditors should fall on the Government of India for the period that the plant has been shut since 2001, they said.

The Government, on its part, has set the ball rolling by setting up a Special Purpose Vehicle (SPV) to restart the project.

The SPV floated by GAIL (India) Ltd and NTPC to revive the plant has been named Ratnagiri Gas and Power Pvt Ltd. And the company would eventually own and operate the assets of the erstwhile Dabhol Power Company (DPC). As promoters, GAIL would source the LNG required to run the power plant, while NTPC would operate the plant and negotiate the power purchase agreement with Maharashtra electricity utilities.

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