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MSEB owes more than Rs 9.50 bn to DPC

Maharashtra State Electricity Board owes a sum in excess of Rs 9.50 billion in form of dues to US energy major Enron's Dabhol Power Company till end-August 2001.

"DPC is presently unable to pursue its remedies under the power purchase agreement and escrow arrangements, for sums owed by MSEB, totalling well in excess of Rs 9.50 billion as at end August 2001", DPC has said in response to MSEB's special leave petition filed last week in the Supreme Court over restraining the company from encashing the Rs 1.36 billion letter of credit.

On September 21, the apex court had given DPC a two-week time to file its response in the matter and said Bombay high court's order restraining Canara Bank from making payments under the L/C 'shall operate pending further orders'.

Refuting MSEB's charge that DPC was using Bank of America towards encashment of the L/C, the company said it had not made a drawing and is no longer beneficiary of the same.

The L/C, after being transferred by DPC, was a separate and distinct contractual obligation of Canara Bank in favour of BoA as security agent for the lenders, it said.

The US energy major has said it was being forced into default and its financial situation 'can and will' only deteriorate.

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