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Centre appoints conciliator for DPC arbitration

Santosh Tiwary

The Centre has appointed Justice B P Jeevan Reddy, chairman, Law Commission as its conciliator to find a solution to the payment problem between Dabhol Power Company and Maharashtra State Electricity Board.

DPC had appointed Lawrence Street, former chief justice of New South Wales, Australia as its conciliator last week. The Enron-promoted company issued a notice for conciliation or arbitration to the Centre on 4 April for not honouring its counter-guarantee for MSEB's December bills of Rs 1.02 billion.

Finance ministry sources said that the government has already informed DPC about Justice Reddy's appointment as its conciliator. DPC sources confirmed that the company had received a communique in this regard from the Union finance ministry.

"Both the parties will soon sit together and appoint an independent conciliator to complete the job within a time-frame of 60 days," said a DPC spokesperson.

Issuing the notice, DPC had said, "This step was necessary in order to preserve our rights in the project, and to ensure that all parties honour their existing contractual obligations."

The notice to the Centre was issued by DPC after the former conveyed to the company that until the availability penalty issue was resolved, it did not intend to pay the December bill under the counter-guarantee.

The MSEB has slapped a Rs 4.02-billion availability penalty on DPC and has demanded adjustments for it against the outstanding bills for December 2000 and January 2001.

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