London court summons govt officials in DPC case

A London court has summoned as witnesses several bureaucrats in the Central and Maharashtra governments who were connected in any manner with the Enron-promoted Dabhol Power Company (DPC).

They will have to appear on August 31 in a Rs 33,000 crore arbitration case launched by foreign lenders to the DPC project. The arbitration proceedings have been launched under the provisions of the Indo-Mauritius Investment Protection Treaty (IMIPT), alleging that the Indian government and Indian financial institutions colluded to expropriate DPC.

Confirming this, a well-informed source said, "Current Maharashtra chief secretary A K Mago, former chief secretary Ajit Nimbalkar, former Maharashtra State Electricity Board (MSEB) chairman Vinay Bansal, principal secretary (energy) B P Pandey and another 15 senior bureaucrats associated with the DPC project at some point of time or another have been summoned as witnesses by the London court."

In a letter to the Maharashtra government on August 23, the current MSEB chairman Jayant Kawle has informed about the summons by the London court. The letter was made available to Business Standard to read.

In a telephonic interview, Vinay Bansal, the former MSEB chairman who is now the chairman of the National Pharmaceutical Pricing Authority, said in New Delhi that those involved in the DPC project would appear in London on August 31, 2004, to brief DLA, the Indian government's solicitors who have to file an affidavit on the Indian government's position in September.

Bansal added that the bureaucrats would have to head for London again in 2005 as witnesses.

One of the officials who have been summoned said, "We were awaiting the Supreme Court of India's ruling on the international arbitration issue prior to the current arbitration getting under way. We have little choice but to remain present in the London court on the date of the hearing."

Blaming the role played by Indian lenders to the DPC for the current impasse, he said, "The finance department of the Maharashtra government had proposed that a resolution be passed by the board of directors of the DPC immediately after all the Enron officials resigned from the board three years ago. We were in a position, by virtue of having a majority in the board, to simply pass a resolution to protect the Indian Union against any future liability arising over the DPC project. This was shot down by a representative of one of the Indian lender institutions who also featured on the DPC board."

Asked whether this was correct, Bansal said he was not the MSEB chairman when this happened and so couldn't comment on the matter.