the Dabhol Power Company to issue the termination notice, Bansal 
said. 
Indian lenders, present at a meeting with foreign financial institutions in 
London earlier this week, have said they favor renegotiation. 
The project has been in trouble since December when the government of 
Maharashtra state, where the Dabhol project is located, said the tariffs were 
exorbitant and demanded a new price agreement. 
The state power utility said it could not pay Dabhol's monthly electricity 
dues, which prompted the company to invoke a federal guarantee in February. 
This was the first time in India that a federal guarantee was invoked. As 
part of the 1995 agreement between the company and the state government, the 
federal government has to pay in case of a state default. 
But before the federalnot allowed to vote at the meeting since they 
were an interested party. The IDBI representative protested against the 
board's decision. 
The meeting was held against the backdrop of a dispute between MSEB and DPC 
over payment of bills. After MSEB failed to pay Rs 102 crore towards the 
December 2000 bill, DPC invoked the state government's guarantee and then the 
Union government's counter guarantee. When payment of the Rs 127-crore 
January bill became overdue, DPC again invoked the state government's 
guarantee. MSEB retaliated on January 28, 2001 by slapping a Rs 401-crore 
penalty for non-supply of electricity at adequate levels. It demanded that 
DPC adjust the bills against this penalty. 
"This stand of MSEB was explained to DPC at the board meeting", a state 
government official said.



Gas