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The Hindu on indiaserver.com : Portugal move a blow to hydel project: NBA

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Friday, March 16, 2001


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Portugal move a blow to hydel project: NBA

By Our Staff Correspondent

BHOPAL, MARCH 15. The Narmada Bachao Andolan (NBA) today revealed that the Portuguese Government has dealt a lethal blow to the controversial Maheshwar hydro-electric project being built on the Narmada river in Central India by refusing to give the COSEC guarantee to the multinational firm Asia Brown Boveri (ABB).

Addressing a press conference here today, Mr. Alok Agrawal of the NBA said the ABB had applied for this guarantee from the Portuguese export credit Agency COSEC to secure a tied loan of Rs. 200 crores ($ 46.28 millions) from the private German bank - Hypovereinsbank - for the sale of ABB produced hydro- mechanical equipment to the Maheshwar Project.

In the absence of the COSEC guarantee, Mr. Agrawal said, the Hypovereinsbank loan of Rs. 200 crores to the Maheshwar Project had also fallen through.

As a result, Alstom - the French Power utility that had recently bought ABB's hydro-power division - was without the guarantee that could help to make the supplier's contract that they had with the project promoters of the Maheshwar Project a reality.

Mr. Agrawal told reporters that the refusal of the COSEC guarantee also implied that the 6 per cent equity that the ABB was to bring would no longer be coming. Nor would the equity share be replaced by Alstom.

It might also be noted that the commitment of project equity of 16 per cent that was to come from Siemens had not been renewed after Siemens failed to obtain the Hermes guarantee from the German Government for the Maheshwar Project in August, 2000.

Mr. Agrawal said the Secretary of the Portugal Ministry of Finance confirmed in a recent written communication to a Portuguese organisation that the COSEC guarantee for the Maheshwar Project had been refused.

This development which had come closely on the heels of the U.S. power utility Ogden's withdrawal from the project in December 2000 (that was to give 49 per cent of the project equity) seemed to suggest that this was the very end of the project.

In another important development, Mr. Agrawal said it was learnt that Harza International of the U.S. - the company that was responsible for the monitoring and coordination of the civil works for the dam had withdrawn from the project.

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