Restarting Dabhol Power could face fresh hurdles with its two stakeholders, Bechtel and GE, demanding full recovery of their investment in the project, lying idle for more than 24 months now.
Buoyed by an independent arbitration panel's order of a binding award of $28.57 million each, Rick Smith, executive vice president of Bechtel said, "We will continue to pursue a full recovery of our investment through all available means."
According to a joint press statement by Bechtel and GE, an independent arbitration panel has ruled unanimously that GE and Bechtel's interests in the Dabhol Power Company, in Maharashtra, were improperly expropriated by the Indian government.
The tribunal ordered a binding award of $28.57 million each for claims they brought against their political risk insurer, the Overseas Private Investment Corporation, an agency of the US government.
Smith said, "We are pleased that this distinguished panel decided in our favour and concluded that the actions of the state of Maharashtra and the national Government of India violated international law and that they took our property without compensation."
Scott Bayman, president of GE India said, "GE and Bechtel have repeatedly indicated to the Government of India and the financial lenders, both foreign and domestic, that they are willing and anxious to assist in the restart of Dabhol phase I and the completion of phase II, as long as the companies are treated fairly."
Bayman also said that they were disappointed by the lack of progress towards a negotiated settlement by India. "Unfortunately, our legal rights have been blocked at every turn in India," he said.
The binding arbitral award by an impartial tribunal, chaired by former US District Court Judge Charles Renfrew, reaffirms "our position, and was just one of many avenues that we will pursue to recover our investments and construction contractor claims."
Both Bechtel and GE hold 10 per cent equity interests in the $3billion Dabhol power plant.
