Maharashtra Govt. happy with DPC stance

By Mahesh Vijapurkar

MUMBAI, MAY 11. The move to renegotiate the power purchase agreement to reduce tariff on the power supplied by the Enron- sponsored Dabhol Power Company appeared to gather some momentum today with the company describing the talks it had with the Godbole Committee as ``fine.'' A second round is scheduled for May 23 but all concerned were cautiously optimistic.

From the accounts available to The Hindu, the renegotiating team, set up by the Maharashtra Government and the DPC, restated their positions. Details were kept under wraps. What came as a morale booster was that the DPC agreed on continuing the dialogue. At no time did the DPC raise the issue of terminating the PPA.

Apparently, the DPC has moved forward from its earlier stand that the Godbole Committee guidelines were ``not a basis'' for any talks. It left the conference room today conceding that the objective was to bring the tariff down. No specifics were discussed but it was expected that the DPC would come forth with some proposals on its own. The initiative, an informed source said, ``has now to come from them.''

The ``threat'' that had became palpable after the April 25 meeting of the DPC Board of Directors at London, where its president and CEO, Mr. Neil McGregor, was authorised to issue a termination notice ``was neither raised nor discussed.'' Since then, Maharashtra has been doubly anxious to have a new PPA on the lines suggested by the earlier Godbole panel but it recognises that gains will be slow in coming.

The tone and presentation made by the DPC was a far cry from the ``no negotiations'' stance taken by the company. Neither was Mr. A. V. Gokak, a senior Central official - it was not Mr. Harish Salve, Solicitor-General of India - nor were Mr. Deepak Parekh, HDFC Chief, Mr. E. A. S. Sarma or Mr. Kirit Parekh, Indira Gandhi Institute of Development Research, present at the meeting.

On DPC's side was Mr. McGregor, and Mr. K. Wade Cline, Managing- Director, Enron India, accompanied by Mr. Mukesh Tyagi and Mr. Sanjeev Khandekar, vice-presidents. None of the bigwigs, expected at the meeting, turned up, giving the impression that this was a preliminary exercise. Sources said ``it was just that and no more.'' The ``positive thing is we are meeting again.''

Contrary to information, the DPC did not have its overseas lenders or anyone else representing the other two partners - Bechtel and General Electric - each of them holding a ten per cent stake. The meeting which the Godbole panel wanted held on May 5 was put off by a week. An observer from the Industrial Development Bank of India, Mr. A. G. Karkhanis, was present. The IDBI leads the consortium of the Indian financial institutions which have backed the exposure to the extent of some Rs. 6,500 crores of the foreign lenders and is keen that the project remain on the rails.

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