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March 16, 2001
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Maharashtra asks Centre not to honour counter-guarantee to DPC

The Maharasthra government asked the Centre on Friday not to honour the counter-guarantee, invoked by Dhabol Power Company promoted by US energy major Enron, saying that the state's claim from the power producer was still pending.

Top officials of the state government and Maharashtra State Electricity Board met finance secretary Ajit Kumar in the wake of DPC invoking the Centre's counter-guarantee for claiming Rs 1.02 billion on the ground that MSEB had defaulted on December payment, officials said.

The Maharashtra state government officials said after the meeting that they had conveyed to the Centre that it should not pay in lieu of the counter-guarantee as DPC had not honoured MSEB's Rs 4.01-billion claim emanating from 'short' supply of power.

"The state government has not paid for its guarantee," they said, adding that DPC should adjust its arrears from the claims of MSEB.

They, however, said that no decision was taken on the issue and that they were just called in to brief the Centre about the Enron project situation.

The officials said that the DPC had supplied only 154 mw of power as against the stipulated 657 mw to MSEB during a period between October 2000 till January 2001.

The Houston-based energy company had on March 8 for the second time invoked the Central government's counter-guarantee to recover outstanding December bill of Rs 1.02 billion.

The January bill of Rs 1.27 billion and February bill of Rs 1.13 billion is also pending.

Enron officials could not be contacted for comments on the meeting between state and central government officials.

Maharashtra officials, however, did not comment on the reported move by Enron to seek arbitration on the payment imbroglio.

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