The Hindu Business Line : `MSEB could not have made counter offer for Enron stake'

THE Maharashtra State Government today sought to distance itself from the controversy over not bidding for Enron's equity in the troubled Dabhol Power Company in a New York-based US Bankruptcy court.

``The agreement reached between GE, Bechtel, OPIC and Enron is a comprehensive settlement which includes mutual releases of claims, share purchases and inter-party agreements and it is unlikely for MSEB to have made such a counter offer,'' the acting MSEB Chairman and Maharashtra's Power Secretary, Mr Jayant Kawale, told reporters here.

A US bankruptcy court has admitted GE and Bechtel's request to buy 49 per cent equity in DPC for $20 million (around Rs 95 crore) from fallen partner Enron.

The court had not entertained a claim made by Reliance Energy, the only Indian party at the hearing, reportedly because it did not have support from the Government.

"It was not as if there was a bidding process happening in the court or that we could have simply bought DPC by paying around Rs 100 crore," Mr Kawale said. He said the court had only ratified an agreement reached by DPC partners GE, Bechtel and bankrupt Enron in February this year. And that the agreement was not only about DPC but involved settlement of counter-claims between the three partners related not only to DPC but also to other companies such as Offshore Power Production (a Dutch Company) which in turn held a stake in Enron India Holdings, the company registered in Cayman islands that is directly involved in Enron's bankruptcy case.

Also, the offer included a draft agreement to be signed by DPC, releasing Enron of its liabilities and claims related to the Indian company. Another clause includes an undertaking by GE and Bechtel to fight arbitrations and other claims initiated by Enron, including the ones against the Indian Government. The two partners have promised to pay Enron a maximum of $342 million or 18 per cent of any successful recovery from claims.

Had MSEB made the offer it would not have brought an end to other claims and litigations in which Enron, GE and Bechtel were involved in, he said. The Board had acted on the advice of one international and two Indian lawyers who did not favour bidding for Enron stake as it would have affected other court cases being fought by MSEB against Enron.