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Enron Mail |
Thanks for the update. Good luck in NY. Mark
Bruce Lundstrom@ENRON_DEVELOPMENT 01/08/2001 08:56 AM To: Stephanie Harris@ENRON, Mark E Haedicke@ECT cc: Rob Walls/NA/Enron@Enron Subject: Dabhol - An Update on Legal Efforts Gentlemen - We are currently in the processing of serving/delivering the GOM Guarantee demand and the PPA Meet and Discuss Letter. Ken Lay approved the delivery in a conference call this morning. Our attention will then turn to the GOI Guarantee demand (can be served a week from today), the Notice of Arbitration under the GOM Guarantee and anticipation of injunctive relief being sought by our counterparties to stay any arbitration and collection/payment on the guarantees. We are scheduled to meet with the lenders in NY tomorrow. Bruce ---------------------- Forwarded by Bruce Lundstrom/ENRON_DEVELOPMENT on 01/08/2001 08:54 AM --------------------------- Bruce Lundstrom 01/05/2001 01:57 PM To: Stephanie Harris@ENRON, Mark E Haedicke@ECT cc: Rob Walls/NA/Enron@Enron Subject: Dabhol - An Update on Legal Efforts Jim/Mark - I know that Rob has been keeping you generally apprised, but I thought that I would update you both on the quickly evolving Dabhol situation. The commercial situation at Dahbol Power Company is deteriorating pretty rapidly. MSEB is now approx. 45 days late on payment in full of the October invoice. They have paid only a relatively modest portion of that bill. Payment on the November bill is about 15 days late. The MSEB Chairman says that MSEB can't pay these invoices. At present, the Governments of Maharashtra and India are refusing to engage in a constructive dialogue on solving the non-payment issue and the 1400 MW that will come on line as part of Phase II. They say that they recognize their obligations as guarantors of MSEB's obligations but are not interested in helping in any different capacity (e.g., GOI buys some or all of Phase II). Until just a few days ago, the lead India bank was refusing to fund even their own ongoing interest obligation. At present, they are refusing to continue funding any other Phase II draw request. The India banks have a great deal to lose and, in our opinion, should strongly consider continuing to fund Phase II. It would seem that the lead India bank is scared, knaive or, worse yet, very pessimistic about Dabhol's future -- perhaps there are other reasons for their current position. We are meeting with the international banks in NY on Tuesday. Our main goal is to convince them to continue to fund and to use their influence to have the India banks do the same. The current India legal crisis team is nearly identical to the 1995 India legal crisis team. The same law firms and lawyers (both Indian and international) are continuing to play much the same roles. We have not identified any particular "holes" in Dabhol's legal position. While the India newspapers have offered up various theories that might allow MSEB to cancel the PPA (frustration of purpose, etc.), none seem compelling. No counterparty has offered up any of these theories directly to DPC. In the short term, we are preparing (1) a demand under the GOM guarantee and (2) a "meet and discuss" letter under the PPA. The current plan is to serve these next week. We are also preparing (3) an arbitration notice under the GOM guarantee, (4) a demand under the GOI guarantee and (5) an action against MERC. MERC is the Maharashtra Energy Regulatory Commission. They have issued "orders" over the last year limiting the amount of power that MESB buys from Dabhol. We do not believe that they have jurisdiction to do so. We may or may not ultimately file this action. Let me know if I can provide any further information. Bruce
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