enron india newsdesk april 23 rd newsclips vince sound articles appears ene ready exit india alternately get arbitration battle scheduled time 10 30 discuss regards sandeep forwarded sandeep kohli enron _ development 04 23 2001 07 59 nikita varma 04 23 2001 07 20 nikita varma enron _ development enron _ development cc bcc sandeep kohli enron _ development subject enron india newsdesk april 23 rd newsclips april 23 2001 http www financialexpress com fe 20010423 fed 3 html godbole report unearths absurd calculations maharashtra could use wriggle dabhol project sucheta dalal april 23 2001 http www financialexpress com fe 20010423 newsl html dpc board set authorise president enron md issue notice termination sanjay jog scrapping power purchase agreement monday april 23 2001 dpc seeks ok exit power project tamal bandyopadhyay ravindran april 23 2001 http www cybernoon com index html enron winding operations india state consolidating dpc arbitration notices sanjay jog monday april 23 2001 http www financialexpress com fe 20010423 news 3 html monday april 23 2001 http www economictimes com today 23 econo 4 htm maharashtra set experts panel enron article also appeared following newspaper business standard april 23 2001 http www business standard com today state 3 asp menu 32 maharashtra set expert panel enron april 23 2001 http www economictimes com today 23 econo 7 htm enron national problem april 23 2001 http www cybernoon com index html cm takes enron delhi today monday april 23 2001 1 real story dabhol judicial probe suggested committee ordered enron deal could embarrass three governments ranjit bhushan monday april 23 2001 mseb revenue collections rs 968 crore march renni abraham financial express april 23 2001 godbole report unearths absurd calculations maharashtra could use wriggle dabhol project sucheta dalal finally quit india time enron though controversial multinational denied plans sell stake dabhol power company dpc informed sources say sent feelers china light power others offload majority holding getting india may best course enron though threatened fight invoked political force majeure energy review committee headed madhav godbole certainly weaken case committee points many infirmities 8 dpc approval process brings question propriety decisions 8 clear 20 enron spent educating india policy makers bureaucrats even teach basics techno economic appraisal due procedure regard large international contracts committee says troubled failure governance seems characterised almost every step decision making process matters relating dpc failure governance broad across different governments different points time state central level across different agencies associated examining project administrative political levels strains belief accept widespread consistent failure execute assigned responsibilities purely co incidental 8 though committee decided proper forum investigate infirmities two key members mr godbole former secretary ministry finance eas sarma asked judicial inquiry process clearing dpc project members felt judicial inquiry would delay negotiation process serve purpose 8 may merit argument delay renegotiating tariffs facilitating enron exit report certainly provides central vigilance commission cvc grounds needs start investigation cvc n vittal already received innumerable requests investigate deal especially beneficiaries education campaign though political establishment may reluctant set judicial inquiry cvc establish whether lapses part government functionaries including political executives 8 ensure appropriate action 8 indeed able establish deliberately uses expensive raw material ignoring world bank warnings worked fanciful demand supply estimates several legal requirements permissions fact committee found mseb paying enron rs 930 crore every year comprises overcharging rs 253 crore account large regassification plant 42 per cent capacity used dpc also rs 100 crore extra billing mseb shipping harbour charges although cost facilities included capital recovery charge charging twice operations maintenance rate stipulated government india enron collects approximately rs 246 crore extra every year also collecting rs 332 crore every year inflated fuel consumption claims enron charging 1878 kcal kwh power purchase agreement ppa although equipment manufacturer guaranteed much lower consumption rate gives fat fuel arbitrage opportunity cost people maharashtra committee also pointed strange practice using four different exchange rates different aspects project negotiation rate rs 32 per dollar assumed calculating debt service rupee loans rs 34 5 per dollar reference rate phase rs 39 35 per dollar reference rate phase ii curious rs 42 per dollar calculating government india tariff forcing reduction excessive charges nothing contract cancellation needs tough negotiation public pressure political establishment godbole committee established dpc tariffs easily halved excess payments eliminated unfair conditions dollarisation payments take pay clause escrow facility fact hampering mseb reform particularly power distribution scrapped security future payments dpc restructured tariff would based increased cash flows reformed distribution system committee also gives enron difficult escape route says multinational finds conditions restructuring onerous free mseb contractual obligations find buyers outside maharashtra committee tried establish another precedent projects negotiated government public right know contracted behalf 8 recommended documents including contracts related independent power projects ipps particularly dpc published maharashtra government within two months also established demand supply estimates state government fanciful committee asked mseb defer negotiations power producers demand levels state permit full absorption power generation ipps recommends negotiations accordance least cost plan spelt report also end hectic lobbying reliance patalganga mittals bhadravati bses saphale others set ipps maharashtra financial express april 23 2001 dpc board set authorise president enron md issue notice termination sanjay jog scrapping power purchase agreement board directors dabhol power company dpc already taken aggressive posture proposed authorise enron india managing director k wade cline dpc president chief executive officer neil mcgregor issue notices termination power purchase agreement ppa transfer dabhol project view continuing default state central governments maharashtra state electricity board mseb board directors would meet april 25 london also plans appoint mr cline true lawful attorney fact 8 authorise represent company negotiation project contracts financing agreements amendments modifications top sources told financial express dpc would authorise mr cline mr mcgregor serve preliminary termination notices transfer notices state central governments mseb clause 17 schedule 11 ppa response continuing default mseb payment obligations ppa failure government maharashtra honour obligations guarantee state support agreement failure government india honour obligations counter guarantee company sought recourse dispute resolution initiated conciliation arbitration proceedings 8 company resolution said consistent recourse contractual remedies company seeks authority serve preliminary termination notices transfer notices pursuant clause 17 schedule 11 ppa time time time upon occurrence event giving rise right serve notices determined company 8 resolution added according resolution directors company secretary officers company acting individually authorised empowered execute deliver documents instruments take actions deem fit effect purpose resolution name behalf company backdrop state government mseb exploring possibilities issuing termination notice dpc failure meet contractual obligations ppa state government mseb sources said notice could served mseb dpc paid rebate penalty rs 409 crore misdeclaration default availability power january 28 february 13 state government mseb reviewed position saturday meeting convened chief minister vilasrao deshmukh view strong case substantial grounds slap termination notice dpc dpc move appoint mr k wade cline true lawful attorney fact 8 deserves importance especially state government proposes set negotiating committee cut per unit cost gauge possibility sale dabhol power power deficit states mr cline would also authorised dispose equipment worn obsolete equipment fuel longer expected used ordinary course amounts exceeding rs 64 crore equivalent foreign currency financial year furthermore mr cline would position enter contracts take actions purpose relating day day operation company business exercise rights discharge obligations project contracts financing agreements business standard monday april 23 2001 dpc seeks ok exit power project tamal bandyopadhyay ravindran enron promoted dabhol power company dpc seeking approval 25 lenders pull plug 3 billion power project maharashtra tomorrow april 23 meeting convened london initiative company meeting crucial dpc board meeting april 25 london discuss issue serving termination notice maharshtra state electricity board mseb dpc go ahead unless gets go ahead lenders bankers said lenders meeting second phase project still construction state government officials clarified since one ppa covering phases project lenders decision applicable existing phase also second phase project involves 1 444 mw generation capacity whereas phase 740 mw already operational according loan agreement even four per cent lenders agree terminate contract dpc 8 highly placed sources lenders consortium said london effect means one lender agree dpc serve preliminary termination notice following notice cooling period six months parties mseb dpc find mutually acceptable solution may take form negotiated ppa sources added sources also said two separate meetings scheduled lenders monday meeting attended lenders including multilateral funding agencies like japanese exim bank opic second round meetings schedule tuesday global loan arrangers anz investment bank csfb abn amro citibank state bank india sbi two representatives indian lenders idbi icici sbi already left london afternoon april 23 2001 enron winding operations india marred controversies since inception us based energy major enron promoted dabhol power company dpc board meet wednesday april 25 london decide fate 2 184 mw project dabhol including winding operations top item agenda empower dpc managing director neil mcgregor wind operations country state government sources told pti saturday contacted dpc spokesperson declined comment agenda london meeting added like comment speculations sources said team comprising three top officials maharashtra state electricity board mseb including chairman vinay bansal would attend high profile board meet bansal told pti mseb decided give fitting reply present case concerning rs 401 crore penalty loss making board slapped dpc february 28 generating required power within stipulated time per power purchase agreement ppa london meet comes two days international domestic financial institutions sit together april 23 discuss dpc future course action wake non payment dues tune rs 223 crore mseb also take account aforesaid penalty payment dues december 2000 january rs 102 crore rs 111 crore respectively sources said state government mseb offered make protest payment per ppa dpc india first fasttrack power project refused accept condition currently enron india holds 65 per cent us 900 million dpc project includes mseb 15 per cent general electric bechtel hold 10 per cent controversial project began 1992 ran rough weather shiv sena bjp came power scrapped revived renegotiating ppa fresh trouble arose october last mseb began defaulting enormous billing following dpc invoked state centre counter guarantee also recently sent three international arbitration notices invoked political forced majeure implying inability conform towards financial commitment dpc yesterday stated plans reduce stake 50 per cent according enron corp chief executive officer jeff skilling company would interested talking potential buyers stake skilling according international financial daily said multinational continues see strong growth north america europe australia indicating possibility exiting india financial express monday april 23 2001 state consolidating dpc arbitration notices sanjay jog maharashtra government decided appeal centre consolidating arbitration notices served dpc continuous default contractual obligations 8 name common arbitrator state government centre mseb maharashtra government team led chief minister vilasrao deshmukh meeting union finance minister yashwant sinha union power minister suresh prabhu monday also proposes appointment non indian arbitrator view cutting cost substantially arbitration proceedings initiated dpc repudiation dabhol phase previous shiv sena bjp government 1995 non indian arbitrator mr kumara swami appointed arbitrator suggestion senior counsel fali nariman state government sources told financial express would write letter dpc regarding arbitration proceedings monday meetings state advocate general goolam wahanwati suggesting suitable arbitrator state central government mseb advocate general also suggest solicitors queens counsel may engaged london purpose incidentally mr prabhu present otherwise complete exercise added deshmukh mseb team scheduled meet union finance minister yashwant sinha power minister suresh prabhu monday new delhi discuss stalemate find acceptable solution meeting sinha prabhu request take initiative send representatives negotiations committee said deshmukh meeting centre comes crucial stage dpc lenders would meeting london day decide upon future finances controversy marred 2 184 mw project dabhol moreover dpc board also scheduled meet april 25 london decide fate 900 million project dabhol including winding operations meeting would discuss topmost item agenda empower dpc managing director neil mcgregor wind operations country dpc already slapped one conciliation notice centre three arbitration notices state government non payment dues amounting rs 213 crore plus interest towards bills due months december 2000 january 2001 asked whether centre send feel possible clubbing together arbitration conciliation processes deshmukh replied negative deshmukh said mseb chairman vinay bansal along two senior officials would attend dpc board meeting london bansal said sunday mseb would present case concerning rs 401 crore penalty loss making board slapped dpc february 28 generating required power within stipulated time per ppa currently enron india holds 65 per cent 900 million dpc project includes mseb 15 per cent general electric bechtel hold 10 per cent pti economic times april 23 2001 enron national problem union power minister suresh prabhu sunday said centre would render possible help resolve enron crisis faced maharashtra haunting entire country prabhu said would meet state chief minister vilasrao deshmukh new delhi tomorrow discuss stalemate payments due us energy major promoted dhabol power company maharashtra state electricity board referring godbole committee report finding dpc keen offering mseb 15 per cent stake national thermal power corporation prabhu said centre received proposal regarding participation central power utility pti afternoon april 23 2001 cm takes enron delhi today chief minister vilasrao deshmukh discuss enron imbroglio union finance minister yashwant sinha union power minister suresh prabhu delhi today request centre appoint representative committee state government setting carry discussions negotiations regarding dabhol power project us based enron power company today special meeting representatives finanicial institutions extended loans dabhol power project also held london meeting directors held wednesday discuss fate 900 million project cloud ever since inception yesterday mr prabhu declared janata darbar thane centre would extend help solve enron crisis backdrop pending bills tune rs 213 crore state fowarded centre payments months december 2000 january 2001 confirming proposal state government handover project centre mr prabhu said situation electricity boards country precarious centre decided assist maharashtra upto rs 250 crore every year improve customer services outlook monday april 23 2001 real story dabhol judicial probe suggested committee ordered enron deal could embarrass three governments ranjit bhushan committee prima facie found infirmities several decisions taken respect enron project different points time successive governments agencies centre state energy review committee headed former home secretary madhav godbole could well real enron story five member high powered committee headed madhav godbole including former union economic affairs secretary e sarma hdfc chairman deepak parekh teri chairman rajendrapachauri maharashtra government official vinay mohan lal recommended judicial probe entire enron power project deal saying signified utter failure governance seems characterised almost every step decision making process relating dabhol project report submitted maharashtra government last fortnight acquired outlook severely critical former chief minister sharad pawar congress 13 day bjp led union government reworked deal 1996 shiv sena supremo balasaheb thackeray government maharashtra headed manohar joshi utter failure governance seems characterised almost every step decision making relating dabhol project madhav godbole committee report investigation ordered could embarrass least three governments report clearly upholds allegations money paid enron politicians bureaucrats clinching deal according committee deal reveals failure governance centre state across different agencies strains belief accept widespread consistent failure execute responsibilities purely coincidental report said proposing set measures implemented something project retrieved godbole sarma also felt panel categorically recommend government india order judicial inquiry finally adopted says congress leader enron could well become biggest political issue maharashtra put question liberalisation particularly power sector proposal already struck panic says ncp praful patel enron decision detrimental haste phase 2 cleared shiv sena bjp government state already entered agreement enron important thing resolve amicably judicial inquiry eyewash issue corruption perception pro market congressmen privately admit governments centre state invited enron even though second phase cleared bjp shiv sena combine says congress spokesperson jaipal reddy right involved parliament deadlock tehelka pro liberalisation congress mps also fear witch hunting could send wrong signals foreign investors non congress mps maharashtra meanwhile claim godbole committee instituted express purpose politicising enron issue think know vilasrao deshmukh gameplan says mp state mps like congress prithviraj chavan question cloak secrecy surrounded deal maintained long judicial committee examine 8 committee report also says enron project subjected techno economic appraisal envisaged provisions electricity supply act 1948 related legislations infirmities could avoided since done questions concerted effort towards exercising undue influence every stage project bound arise exhaustive 93 page report points highlight speed 13 day vajpayee government cleared project minutes quit says congress mp prithviraj chavan enron project held exemplar impending liberalisation early 90 despite several controversies established power project dabhol 150 km south mumbai july 1992 enron signed mou maharashtra state electricity board mseb set 2 550 mw station part government fast track projects subsequently shiv sena bjp came power maharashtra filed writ project curiously led renegotiations enron committee quoted bombay high court order renegotiated deal gom decided revive project acted manner predecessors office done forgot competitive bidding transparency speed negotiating group studied project made proposal renegotiatons accepted dabhol unprecedented says chavan would particularly like highlight speed 13 day vajpayee government centre endorsed renegotiated project minutes resigned since commissioning plant may 1999 mseb paid rs 1 607 crore power bought dabhol watttage power bought indian built power plants fired indigenous coal payment would approximately rs 736 crore first year half operation dpc drained maharashtra exchequer nearly rs 1 000 crore central electricity authority cea fact pointed dabhol plant least costly option mseb inexpensive alternatives like four units kaparkheda preliminary stage report notes mseb made efforts seriously pursue projects might remained preliminary stages adds members opinion mseb maharashtra government erred seriously based information available time proceeding dpc base load factor even capacity reduced failure seems compounded laxity union power ministry finance ministry cea quotes cea saying since union finance ministry found tariff reasonable examination required strangely bal thackeray shiv sena came power together bjp maharashtra filed writ court renegotiated deal new shiv sena bjp government took cm manohar joshi appointed renegotiating committee 1996 made right noises actually managing reduce tariff certain things remained inexplicable fresh clearances required cea also said since cost increase involved fresh formal clearance necessary says committee adds strength suspicion cea consider economic aspects project indeed given non availability official record meeting june 24 1994 committee nature letter dated december 23 1994 committee doubtful whether economic aspects dpc discussed credibility shiv sena bjp government seriously questioned committee finds unexplicable sic mention reduction capital cost project 2 828 million 2 501 million agreed dpc summary report renegotiating committee panel observes says lawyer prashant bhushan strange shiv sena bjp government first filed writ court coolly renegotiated deal committee spells losses incurred deal subsequent commissioning dpc financial deterioration mseb rapid mseb profit 1998 99 plunged huge losses rs 1681 crore 1999 2000 significantly world bank 1993 predicted system inherent weaknesses letter written power secretary r vasudevan top bank official said detailed review analytical framework costing assumptions reconfirm earlier conclusion dabhol project presently formulated economically justified assessment project large enter mseb system 1998 proposed base load operation could result uneconomic plant dispatch already existing lower variable cost coal power would replaced higher cost lng power enron persistence gullibility indian side gauged high ranking enron official joe sutton letter key indian official ajit nimbalkar recently met world bank following articles india papers feel world bank opinion changed engage pr firm hopefully manage media project solid support agencies washington key question enron deal whether developed state like maharashtra needs outside intervention power sector first time godbole committee raised objections viability project according report mseb one better performing boards country despite faulty transmission distribution system managed consistently earn net revenue surpluses accrual basis maharashtra accounts nearly one fourth gross value india industrial sector one states achieve 100 per cent electrification since 95 mseb adding generation improvement largely due renovation modernisation undertaken mseb exceeded expectations time dpc considered report points following policy cross subsidy roughly nine ten users subsidised gap average cost supply average realisation much fact subsidy claim decreased rs 630 crore 1995 96 rs 355 crore 1998 99 1999 2000 increased nearly five fold rs 2 084 crore due sudden increase gap 26 paise per unit 15 41 paise increase 173 per cent increase subsidy claim rs 1 729 crore due increase gap principally increase power purchase costs says committee adding without dpc without problems loss mseb could financially healthy happen since enron stay committee come far reaching recommendations make public dabhol related documents agreements restructure dabhol project bring cost power restructure dpc financially allow sale dpc power outside maharashtra examine ppas accordance least cost plans thoroughly reform mseb committee know become reality political consensus forming public opinion question achieved unstable political environment priya sahgal making scam 1992 centre invites enron set fast track power project dec 1993 first ppa signed mseb 1994 enron starts construction 1995 sena bjp govt scraps enron 1996 state govt renegotiates project 1996 13 day vajpayee govt approves counter guarantee may 1996 state cabinet clears ppa may 13 1999 phase commissioned jul 1999 financial closure phase ii oct 2000 mseb defaults payment subsequently stops paying monthly bills feb 6 2001 enron invokes central government counter guarantee business standard monday april 23 2001 mseb revenue collections rs 968 crore march renni abraham maharashtra state electricity board mseb revenue collections march 2001 stood record rs 968 crore largely due disconnection drive defaulter connections pegged nearly 20 000 disconnections month resulted compliance consumers dabhol power company dpc monthly financial burden issue topic discussion among arbitrators negotiating table mseb turned putting house order ward criticism fiscal condition could termed facilitator entire dpc tariff crisis state electricity board put matters relating performance record instance mseb recorded highest power generation year ended march 31 2001 45930 units compared previous year 45582 units making top seb country respect similarly power stations recorded highest availability percentage 86 1 84 6 per cent last fiscal plant load factor 72 78 per cent compared 71 7 per cent 2000 parli power station recorded highest ever generation ten years life time 2000 4545 million units made eligible meritorious productivity award eligibility guidelines issued government india carrying cash award rs 12 5 lakh power stations state without exception also fulfill eligibility criteria cash award senior mseb official said similarly chandrapur power station became first power station state electricity board get iso 9002 certification senior mseb official said earlier mseb suffering much interference day day functioning agriculturists touted major reason deteriorating accruals theft electricity transmission distribution stage conveniently camouflaged head recent past government authorised mseb take steps curb misuse power officials many including chief engineer suffered suspensions