Left MP opposes Dabhol deal

Dipankar Mukherjee, CPI(M) member of Paarliament, in a letter to Prime Minister Manmohan Singh, has urged him to stop the Dabhol Power Company (DPC) bail-out until a "detailed discussion" on the issue takes place.

"I am constrained to invite your attention to the disquieting reports regarding agreement between financial Institutions led by IDBI under the guidance of the finance ministry and overseas lenders of the DPC," he said in the letter written on April 15.

"The move, I am afraid, could be interpreted as a tacit admission of expropriation of the DPC by government," he said. The Left party MPs are expected to raise the matter in Parliament.

He said the reported agreement to settle the US-based Overseas Investment Corporation's $111.7 million "political risk insurance", as measure to persuade the US administration to terminate all arbitration proceedings against the government could set a dangerous precedent for foreign investors/IIPs to ignore state or central regulatory commissions.

By challenging the jurisdiction of the Maharashtra State Electricity Regulatory Commission, "a big question mark has been put on the legislative power of the government by an offshoot of a disrupted company like Enron," he said.

"Instead of asserting India's sovereign right to settle such commercial disputes within its legislative framework, there is a pressure on Indian FIs and PSUs like NTPC and GAIL to bail out a commercially unviable entity under pressure from overseas lenders and the US government," he said.