AES SEEKS CENTRAL INTERVENTION ON DISPUTE WITH ORISSA GOVERNMENT

After the Dabhol imbroglio, it’s the turn of another American power company – AES Corporation – to raise issues of ‘expropriation, repeated contract violation, intimadation, lack of support for reforms and direct interference with day-to-day management” by the Orissa government.

In a letter to Prime Minister Atal Bihar Vajpayee, AES president and chief executive officer Dennis W Bakke has sought central intervention in resolving the company’s disputes in the state. AES is operating the Orissa Power Generation Corporation (OPGC) and the Ib Valley Project in the state, while it recently pulled out of a distribution company – Central Electricity Supply Company of Orissa (CESCO) – citing failure by the Orissa government to pursue reforms.

Despite having started in 1992 as a fast track project eligible for counter gurantee from the centre, the Ib Valley project failed to materialize even after nine years despite significance capital expenditure by AES, the letter has said. “The main obstacle has been the failure of the government of Orissa in fulfilling its commitments for the project,’ it said.

“Even though our Ib valley project languished, AES enthusiastically and successfully participated in 1998 in the first ever state initiated privatisation undertaken in India of any power plant,’ the letter said.

Courtesy: Business Standard

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