Dabhol -- A Brief Legal Update

Gentlemen -

A few updates:

We hope to file the petition on Monday in the Bombay High Court seeking a
ruling that the MERC does not have jurisdiction over the PPA and the current
disputes between MSEB and Dabhol Power Company.

The Dabhol lenders have planned 3 days of meetings in Singapore this coming
week and we will attend these meetings. Our lenders seem to be increasingly
nervous. They may try to cure the construction contract defaults (over $30
million would be required in mid-June). While we do not relish having the
construction contracts fall away, we do not believe that funding is prudent
at this point. MSEB has torn up the PPA and stated that it will not
cooperate with Phase II power station testing, the only real remaining
function under the power plant construction contract.

A few insolvency/creditors' rights lawyers from Skadden will be here on
Wednesday to discuss Dabhol creditor remedies and possible DPC defenses (both
in India and the U.S.). A lawyer from Susman Godfrey is scheduled to join us
at that meeting.

Bruce