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September 19, 2001
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Maharashtra govt announces terms of DPC probe

Our Correspondent in Bombay

The Congress-NCP led ruling Democratic Front government in Maharashtra on Wednesday decided to constitute a judicial inquiry commission to probe into the deal between Enron's Dabhol Power Company and Maharashtra State Elecricity Board and announced the terms of reference of the judicial probe.

Announcing this at a press conference in Bombay, the Chief Minister Vilasrao Deshmukh disclosed that the probe will cover the lapses committed by the government, circumstances under which the power purchase agreement was signed, the people involved, and the factors that made the second phase of the project binding.

The CM disclosed that the probe, to be headed by a retired Supreme Court judge, will be constituted under the provisions of the Commission of Inquiry Act.

The other terms of reference include:

  • To check the legal validity of the consent letters, licenses, agreements and approvals to the project

  • To probe the information relating to the project's cost, financial management, state's power demand and supply projection made by DPC, and the adverse effect the rates had on power tariff

  • The circumstances under which the negotiations were held, then cancelled and renegotiated

  • The probe shall submit its report to the government along with its recommendations within six months.

Deshmukh said that the findings of the probe will serve as the basis for holding any future negotiation.

When asked about the power failures in some parts of the state, Deshmukh said that even in these trying time the state can hardly afford to buy the expensive DPC power.

Deshmukh pointed out that the state government was adhering to MERC guidelines of buying power from the cheapest source, and added that the government was asking the NTPC for more power to overcome the state's power shortage.

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