Deepening the divide with Dabhol's Indian lenders

Vol 6, PW 26 (12 Mar 03) People & Policy

ITS NOT difficult to understand why Dabhol's foreign lenders are sceptical of the Indian government's motives.

A glance at the attendance list of a meeting in Singapore scheduled for 6th and 7th March called by foreign lenders is enough. Information about this meeting was available to the Indian government as well as Indian lenders as long ago as mid February but we understand not a single representative from the Indian government or Indian financial institutions bothered to turn up.

This further underlines the deep schism that separates Dabhol's Indian and overseas lenders. OPIC chaired the Singapore meeting, called to discuss two key issues: a proposal by General Electric and Bechtel to buy Enron's stake in Dabhol and discussion of the 26th February letter with the Indian side in a bid to find an "amicable" solution.

But the Indian side stayed away and the meeting achieved little. It also left foreign lenders angry and bitter.

"The meeting was a non-starter," reveals a source that was present. "Foreign lenders were very angry that no representative from the Indian side turned up.

They have decided not to cooperate with the Indian government over the restart and sale of DPC unless their concerns are addressed." Of particular concern was the non-attendance of IDBI. Chairman and managing director P.

P Vora has an astounding excuse: We are not aware of any such meeting," he tells PETROWATCH. "The foreign lenders have heldmeetings before in our absence."