CLARIFICATION

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PRESS NOTE

This is with reference to the news item appearing in a section of the press, on July 18, 2002 regarding the Possibility of the National Thermal Power Corporation (NTPC) taking over the Dabhol Power Project in Maharashtra. It is clarified by Secretary(Power) that there is no question of NTPC taking over the Dabhol Power Project or even running it on a management contract basis. The basic issue of purchase of the entire power produced by the project is decided between the lenders and the Maharashtra State Electricity Board (MSEB). The purchase of power by MSEB as agreed in the contract of the Power Purchase Agreement (PPA) is the main issue. Secretary(Power) has also further clarified that till this issue is resolved between the lenders and MSEB, there is no question of any one else taking over or running the plant on any contract basis. The Financial Institutions and others would then look at the possibility of someone like NTPC running such a plant only as a contractor without any other obligation whatsoever.