The Hindu : Front Page : Panel rules in favour of Bechtel

Online edition of India's National Newspaper
Wednesday, May 04, 2005

Front Page

Front Page

Panel rules in favour of Bechtel

Special Correspondent

MUMBAI: Even as Maharashtra reels under a serious power crisis, the State Government received news on Tuesday that the International Court of Arbitration in Paris, in a unanimous ruling, has asked the State and two affiliate agencies to pay $125 million as compensation to a Bechtel affiliate, Energy Enterprises (Mauritius) Company. It owns 10 per cent of the $3-billion Dabhol Power Company (DPC).

The two-phase 2184-MW DPC plant has not been functioning since 2001 after disagreement broke out on the terms of the Power Purchase Agreement (PPA).

A tribunal in the United States in 2003 had ruled in favour of Bechtel and ordered the U.S. Government agency, Overseas Private Investment Corporation, to pay $28.57 million in political risk insurance claims to Bechtel. Two more arbitration cases are pending in London and in the Netherlands.

Steve Dixon, vice-president of Bechtel Enterprises, said in a press statement: "The State of Maharashtra and its agencies have conducted a campaign to avoid their obligations under the PPA and related project agreements for Dabhol and have played a key role in blocking DPC and its shareholders from pursuing international arbitration to defend their legal rights. Their wilful misconduct is a clear violation of our Shareholder Agreement and we are gratified that the Tribunal has agreed with us."

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