Bechtel Corporation has announced that it has attached all shares held by the Maharashtra government in the $2.9-billion Dabhol power plant after a court order in the US.

The Maharashtra government holds a 14.6 per cent stake in Dabhol Power Company through Maharashtra Power Development Corporation (MPDC), an SPV of the Maharashtra State Electricity Board. Bechtel and General Electric hold the remaining equity.

Bechtel had sought $123 million from MSEB for violation of shareholder rights.

However, Bechtel says that it is even now prepared to help General Electric and the Indian government to revive DPC.

The US District Judge Lewis Kaplan of the Southern District of New York signed the order. The order directs that the attachments of assets held by Maharashtra Power Development Corporation, which holds a 14.6 per cent stake in Dabhol Power Corp.

DPC, in which General Electric and Bechtel hold the majority stake was shut down in 2001 when the state of Maharashtra reneged on its legal commitments to purchase power and support completion of the second of two generating units.

On April 27, the International Court of Arbitration in Paris also ruled that the Maharashtra company and the Government of Maharashtra conspired to block DPC from exercising its contractual rights to arbitrate its claims against the state of Maharashtra and the government of India for the expropriation of DPC's investment. The international court gave the corporation and state time until May 27 to pay the damages.

The chief minister of Maharashtra Vilasrao Deshmukh said the state was seeking more information on the matter.

"We are disappointed that the Indian authorities have given us no choice but to begin proceedings to seize their assets. Their refusal to acknowledge valid legal orders also sends a troubling message to foreign investors whose capital and technical expertise could help modernise India's infrastructure," Mr Tim Statton, Bechtel's executive vice-president, said in a release.

Bechtel's affiliates in Mauritius and Netherlands have filed two additional arbitration claims against the Government of India to recover the value of their "lost investments" in DPC, which could add up to more than $6 billion.

The Dabhol power plant, India's largest foreign-investment project till date, was set up to provide 2,184 megawatts of power. The plant was shut down in 2001 in the wake of a tariff dispute between its main promoters and its customer, the Maharashtra State Electricity Board and has since been dogged by legal disputes between the foreign stakeholders and the Maharashtra Government.