Legal action begins against Dabhol insurers

Vol 13, PW 13 (03 Dec 09) People & Policy

Ratnagiri Gas and Power has gone to court against two insurance companies over unpaid claims for damaged turbines at the Dabhol power station.

PETROWATCH learns Ratnagiri Gas lawyers filed a case in the Delhi State Consumer Disputes Redressal Commission against state-owned National Insurance and Oriental Insurance companies on November 23. Ratnagiri Gas, a joint venture between GAIL and NTPC, is demanding Rs130cr ($29m) for profits lost due to damaged turbines at the 2150-MW Dabhol power station in Maharashtra.

It has unsuccessfully been trying to get these state insurers to pay for the past three years. “Going to the consumer court was the only option left for us,â€‌ says a Ratnagiri Gas source.

“According to our interpretation of the Dabhol insurance policy, our claims are covered by consumer protection laws.â€‌ He adds that Ratnagiri Gas would have preferred to avoid litigation, as all the parties involved are government promoted companies.

Separately, on November 24, the Ratnagiri Gas board approved the award of a Rs97cr ($21m) dredging contract for the Dabhol shipping channel to Mumbai-based Gammon India in an effort to get the 5m t/y Dabhol LNG import terminal up and running. “We’ve asked our project management consultant Engineers India (EIL) for some technical clarifications,â€‌ says a Ratnagiri Gas source.

“After those come in, the contract will be signed with Gammon.â€‌ State-owned Shipping Corporation of India will operate and maintain the Dabhol LNG port until May 2010, when it will then be shut for the monsoon season that lasts till end-September.

Ratnagiri gas will soon tender for a long-term operations and maintenance contractor who can take over once Dabhol reopens post-monsoon on October 1.