Mumbai, Oct. 13: GE and Bechtel, US investors in Enron's $2.9 billion Dabhol power project, today said they have offered domestic financial institutions, led by IDBI, a new plan to revive the project.
The plan envisages settling unpaid contractor claims and using independent arbitration to resolve claims by Bechtel Enterprises and GE Structured Finance to recover their investments.
In a letter, the two companies said they are willing to restart phase I and complete phase II of the Dabhol power project. They offered a three-pronged proposal to break the deadlock in negotiations.
The letter was signed by Scott Bayman, president and CEO of GE India, and Richard Smith, executive vice-president and managing director of Bechtel Enterprises Holdings Inc.
The US majors want to separate outstanding unpaid contractor claims relating to the project from equity claims.
The strategy also talks about settling the outstanding contractor claims on an equitable commercial basis as part of the actual restart of Dabhol facilities and resolving the two companies' equity claims through the agreed upon contractual remedies of independent binding arbitration without judicial or other interference.
GE and Bechtel asserted that separating the commercial relationship and the equity claims was the best way to expedite the efforts to restart the plant.
The companies will not make a prior resolution of equity claims a requirement for their support of the Dabhol power project, the foreign partners said. Assuming that a commercial agreement can be reached, lenders or new sponsor(s) will be provided information and assurances of the two companies’ participation as suppliers and contractors in restarting phase I and in completing phase II, they added.
“Upon signing and fulfilment of contractual items, GE and Bechtel will begin work,” the duo promised.