GE and Bechtel agree return of Dabhol drawings

Vol 9, PW 10 (25 Aug 05) Midstream & Downstream
     

GE and Bechtel have agreed not to press their claim of about $1.2bn against Delhi in the arbitration launched in The Netherlands over the Dabhol project.

However, if the arbitration goes ahead and the government of India has to pay any money to either of them, both have agreed to return the amounts to Delhi. Crucially, GE and Bechtel have also agreed to, deliver all project related documents within their possession, to negotiate in good faith with the new entity that takes over the project contracts to provide technical services to restart the plant.

Broadly, GE and Bechtel have agreed to mutually release Indian authorities from all litigation and from all pending and future claims over Dabhol. As for claims not within their control, GE and Bechtel have agreed to undertake reasonable endeavours to release India.

Bechtel has also agreed not to enforce the award of $123m in its favour by a New York tribunal against the government of Maharashtra. Bechtel has also agreed to pay India taxes of up to $3m.

Both companies also demanded withdrawal of all cases against them by the Maharashtra Pollution Control Board. India has agreed that cases will be withdrawn against only those GE directors not on the board of Dabhol Power Company on the day the breach was alleged.

Similar terms apply to Bechtel. GE and Bechtel have also agreed to pay their costs and half of Enrons costs to remedy alleged pollution.

Also agreed is that GE and Bechtel equity in Dabhol Power Company will be transferred to the Ratnagiri Gas and Power Pvt Ltd, owned by GAIL and NTPC, which will own and operate the project. Bechtel has agreed to indemnify Delhi against all damage caused by its failure to transfer 65.85% Enron shares in Dabhol to the new operator.

GE and Bechtel originally wanted disputes from this settlement to be heard in New York but eventually agreed on London.