Cong-NCP govt saved ₹26,000 cr thanks to Mukherjee
He had the uphill task of reaching an early settlement with the now defunct Enron’s previous partners GE and Bechtel
The Congress-NCP government was able to save the payment of an arbitration liability of whopping Rs 26,000 crore payable to the erstwhile Dabhol Power Company only because of a hard negotiator late Pranab Mukherjee, who was the external affairs minister and also chairman of the Empowered Group of Ministers appointed by the UPA Government. The other members included Sharad Pawar, Sushilkumar Shinde and Murli Deora while former Maharashtra Chief Minister Vilasrao Deshmukh and Energy Minister Dilip Walse-Patil were invitees for the meetings.
Former Prime Minister Manmohan Singh’s mandate to Mukherjee led EGoM was to revive the project with a total generation capacity of 2,167 mw which was closed since May 2001 following legal and regulatory disputes. Mukherjee was tasked with reaching an early settlement with the now defunct Enron’s previous partners GE and Bechtel and also prepare a roadmap for its restart with a new avatar.
Because of Mukherjee’s hard bargaining and state and Central government’s preparedness, the GE and Bechtel were together paid $305 million and subsequently they withdrew arbitration from London and Singapore.
Thereafter, the lenders, NTPC, GAIL India and MSEB Holding came together to form the Ratnagiri Gas Power and Power Pvt Ltd (RGGPL) in October 2005 and the project restarted generation in May 2006. All credit goes to Mukherjee’s way of smooth handling with a headmaster’s touch.
Even though the project was revived, the EGoM continued its operations as the Centre wanted Mukherjee’s expertise for further expanding the generation to 5,000 mw. Besides, the Centre wanted to make the LNG plant at the site to run with full capacity.
Mukherjee during one of the meetings accepted Maharashtra Government’s request to visit the project site. He decided to chair EGoM’s meeting at the project site which he did on December 31, 2007. In a starch dhoti and sadra, Mukherjee with other members visited the generation plant and LNG facility.
At the venue, Mukherjee held the press conference and announced that the project will be dedicated to the nation in March or April 2008. He also announced to increase the generation capacity of Dabhol to 5000 MW by 2015, commissioning the project fully by the end of the current financial year and finding long term solution to the fuel problem.
Unfortunately, the RGPPL could not complete Mukherjee’s resolve due to various factors and currently supplying 500 mw to the Indian Railways.