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April 13, 2001
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Money > Business Headlines > Report April 13, 2001 |
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Lenders to DPC seek legal viewS Ravindran The consortium of domestic lenders to the 1,444 mw second phase of the Dabhol power project met on Thursday to take stock of the situation. Representatives of the Industrial Development Bank of India, State Bank of India and IFCI were present at the meeting. "The meeting was primarily convened in the wake of the political force majeure clause invoked by the Dabhol Power Company. We have also sought a legal opinion about this and discussed the issue at the meeting," sources in the lenders' consortium said. They also said that although discussions were held, no particular decision had been taken. The meeting, they said, was convened at short notice and had no particular agenda. DPC had invoked a political force majeure clause on Monday. This had come in the face of the Central government deciding not to honour the counter guarantee for the Rs 1.02-billion December, 2000 bill. Under such a clause, a party need not fulfill its part of its contract due to unexpected circumstances, like say the recent earthquake in Gujarat. DPC had while invoking the force majeure clause objected to Maharashtra chief minister Vilasrao Deshmukh's statements expressing his disinclination towards the Dabhol project. State finance minister Jayant Patil's statement on the floor of the Legislative Assembly that the DPC imbroglio could be resolved only if the power generated by DPC was routed through the central grid too had come under fire. Although domestic lenders are not coming public with their concerns, they have plenty of reasons to be worried. They have advanced $333 million as rupee loan to the second phase. The bulk of this has been given by IDBI. SBI and Canara Bank have advanced $175 million and $25 million, respectively. IFCI has an exposure of $25 million, both in terms of a loan and a deferred payment guarantee. Powered by ALSO READ:
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