DVC mulls Jharkhand government’s decision to pay RInfra dues
Damodar Valley Corporation (DVC) is now watching the Jharkhand government’s decision to comply with the Supreme Court’s May 31 order ordering it to pay Reliance Infra Rs 535 crore in cash and Rs 303 crore by bank guarantee of here on July 31.
Ram Naresh Singh, chairman of the Kolkata-based DVC, pledged in writing to the Supreme Court on June 6, saying that DVC will abide by the court’s directive in terms of the arbitration award. DVC is due to receive arrears of Rs 3,711.27 crore from Jharkhand Urja Vitaran Nigam (JUVN), but Jharkhand cabinet will take the decision to pay only part of it – up to Rs 800 crore. This payment to DVC would benefit both DVC and Reliance Infra.
Rishi Nandan, general manager, commercial, told FE that the issue of payment to DVC rests with the government. “The payment would be made once the (Jharkhand) cabinet approves the decision,” Nandan said.
A Reliance Infra official said the SC ordered DVC to issue an order on May 31 pledging to protect the company’s interests but, at the same time, DVC was granted an extension of payment.
In an arbitration dispute, the award was made in favor of Reliance Infra and DVC was asked to pay a lump sum of Rs 1,250 crore, comprising a cash component of approximately Rs 898 crore and six bank guarantees of approximately 353 crore. There is also an interest obligation of 12% per annum on the total sum, amounting to Rs 898 crore.