GE and Bechtel have put forward a three-pronged strategy to the Indian lenders, led by the Industrial Development Bank of India, to restart Phase I and complete Phase II of the $3 billion Dabhol project.

These two United States-based companies, which hold 10 per cent stake each in Dabhol Power Company, have suggested separating the outstanding unpaid contractor claims relating to the restarting of Phase I and completion of Phase II of the project from the equity claims to expedite negotiations and restart the plant.

Responding to offers made by Rothschild's, the firm advising Indian lenders, the companies in a release said the outstanding contractor claims should be settled on an equitable commercial basis as part of the actual restart of the plant.

Resolving these entities' equity claims through the agreed contractual remedies of independent binding arbitration without judicial or other interference was the third move suggested by them.

Separating the commercial relationship and the equity claims is the best way to expedite the efforts necessary to recommence the project.

In a letter to domestic lenders, they said, "As an act of good faith, the companies will not make a prior resolution of equity claims a requirement for their support of the restart and completion of a 'new' Dabhol".