Enron tangle: IDBI, Maharashtra begin talks

MUMBAI OCT. 28. The Maharashtra Government and the Industrial Development Bank of India (IDBI) today started formal talks on how best to overcome the uncertainties surrounding the now shutdown Enron's Dabhol Power Company so that eventually the assets — not the equity — can be sold and the $3 billion utility revived.

The ``preliminary'' meeting was conducted between a Cabinet sub-committee headed by the State Finance Minister, Jayant Patil, and the IDBI Chairman, M. Damodaran. The IDBI is the leader of a consortium of Indian lenders and have so far suffered substantial financial losses in the matter.

Sources that participated in the meeting told The Hindu that the ``IDBI has brought some proposals whereby they can cut out all uncertain elements and bring the entire issue to some solid footing so that someone or the other may be offered the assets. IDBI, it became clear to us, is also talking to Bechtel and General Electric,'' which were equity partners in the floundered power utility.

Most of the proposals , sources said, were essentially on the basis of a position paper prepared by N.M. Rothschild, IDBI's consultant, where by all liabilities of all the stake-holders are extinguished and the MSEB, which bought a 15 per cent stake worth some Rs. 950 crores, be written off.

The Cabinet committee was set up last week but its announcement was withheld so as not to arouse unrealistic expectations and controversies. As and when the IDBI formulates its views on what the Maharashtra Government has to offer, it would revert and seek a meeting with the Cabinet subcommittee.

The general drift of the discussions is that all disputes among various parties, including the Maharashtra State Electricity Board, which rescinded the contract to buy power from the DPC should be minimised, project cost should be fixed, all the variables that have emerged over time figured out ``the assets made attractive for the buyer.'' There are any number of disputes, including the tariff to be charged, the quality of assets put in place by promoters such as Enron and even jurisdiction of the disputes settlement mechanism.

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