World Watch
The Wall Street Journal, 04/25/01

CMS Preferred Bidder on 320 MW Saudi Power Plant, MEED Says
Bloomberg, 04/25/01

Bill could force refund from Reliant
Houston Chronicle, 04/25/01

Signaling Change, Bush Picks 3 Executives for Pentagon Jobs
The New York Times, 04/25/01

Stocks Fall Back After Profit Reports
The Washington Post, 04/25/01

India State Ready To Pay Enron Unit For March
Dow Jones International News, 04/25/01

Law minister: India's court system hindering economic progress
Associated Press Newswires, 04/25/01

Indian state ready to pay Enron bill for power
Associated Press Newswires, 04/25/01

INDIA: Enron action tarnishes India's investment image.
Reuters English News Service, 04/25/01

INDIAN COMMITTEE TO RENEGOTIATE POWER AGREEMENT WITH ENRON
Asia Pulse, 04/25/01

Enron mum on Indian project sale reports
The Daily Deal, 04/25/01

India: Babus as negotiators
Business Line (The Hindu), 04/25/01

Markets / Your Money Poor Earnings Reports Drag Markets to Moderate Losses
Los Angeles Times, 04/25/01

Aquila Shares Rise 24% After IPO Raises $420 Million (Update1)
Bloomberg, 04/24/01

A Bandwidth Glut Exists in the Long-Haul Market, but a Shortage Exists in the
Metro and Access Markets
PR Newswire, 04/24/01

Businesses back bill to refund Texas utility customers billions
Associated Press Newswires, 04/24/01

Starwood Hotels Meets 1Q Despite Economy, 2Q Views Cut
Dow Jones News Service, 04/24/01

Enron, Napster take honors at MIT eBusiness awards
Associated Press Newswires, 04/24/01

INDIA: UPDATE 1-Termination on Enron's Dabhol meeting agenda.
Reuters English News Service, 04/24/01

International
World Watch
Compiled by David I. Oyama

04/25/2001
The Wall Street Journal
A15
(Copyright (c) 2001, Dow Jones & Company, Inc.)

ASIA/PACIFIC
Chinese Delisting May Signal Cleanup
China announced the first delisting of a company, signaling a new effort to
clean up its stock exchanges by ridding them of their most troubled
companies. The decision to delist Shanghai Narcissus Electrical Appliance
follows months of heated talks between the company and the Shanghai Stock
Exchange. Shanghai Narcissus was once the country's second-largest maker of
washing machines but this month reported its fourth straight annual loss. The
delisting could pave the way for the China Securities Regulatory Commission
to delist as many as 12 similarly unprofitable companies. But pressure from
local governments, which control many indebted listed firms, could slow
reforms.
U.S., Singapore Rated Most Competitive
The U.S. and Singapore kept the top spots as the world's most competitive
nations, and strong growth in Hong Kong moved it back to sixth place from
12th, according to an annual survey. Japan, once a leader, fell to 26th in
the poll of business leaders by the International Institute for Management
Development in Lausanne, Switzerland. Canada slipped one spot to No. 9. The
top 10 places were filled out by Finland, Luxembourg, the Netherlands,
Ireland, Sweden and Switzerland.
Dabhol Board May Take Preliminary Step
U.S. power company Enron's Indian unit, Dabhol Power, may take a preliminary
step toward ending its $3 billion project near Bombay, as part of a dispute
over payments by its main customer, the Maharashtra State Electricity Board,
or MSEB, a Dabhol board member said. At a meeting today in London, Dabhol's
board will consider a preliminary termination notice, according to Don
Sturmer, a vice president at Bechtel Enterprises and member of the board of
Dabhol Power, in which Bechtel owns 10%. Mr. Sturmer said the "procedural"
step would allow Dabhol to suspend deliveries as it negotiates its dispute
with the MSEB. Enron holds a 65% stake in Dabhol. Besides Bechtel, other
shareholders are General Electric of the U.S., with 10%, and the MSEB, with
15%.
Intel Cuts Stake in CyberWorks Venture
U.S. semiconductor maker Intel has scaled back its stake in Network of the
World, the debt-burdened interactive television service it has been
developing with Hong Kong telecommunications and Internet company Pacific
Century CyberWorks. Intel's move means CyberWorks will have to bear a greater
share of any further investment in the service. CyberWorks disclosed in its
annual report yesterday that Intel exercised part of an option that allows it
to exchange its stake in the venture, known as NOW, for shares in CyberWorks.
The transaction reduced Intel's stake to around 35% from 40%.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

CMS Preferred Bidder on 320 MW Saudi Power Plant, MEED Says
2001-04-25 03:19 (New York)

     Riyadh, Saudi Arabia, April 25 (Bloomberg) -- CMS Energy
Corp., a U.S. power provider based in Michigan state, is the
preferred bidder to develop what may be Saudi Arabia's first
privately owned power plant, Middle East Economic Digest reported,
without citing sources.
     CMS, together with a local partner, AH Al-Zamil Group, is
negotiating details with the government-owned Saudi Petrochemical
Co. to build a 320 megawatt plant in the kingdom's largest purpose-
built industrial town at Jubail, 190 miles north-east of the
capital, Riyadh, London-based MEED said.
     CMS, for which the Industrial Bank of Japan is acting as
financial advisor, is bidding against the U.S.'s Enron Corp. and
the local Xenel Industries, the weekly magazine said. The magazine
did not say what the plant will cost to build.
     The Saudi government has pledged to increase the kingdom's
electricity generating capacity from about 23,000 megawatts now to
60,000 megawatts in 2023 at a cost of $100 billion, according to
Saudi American Bank. It has decided to open up the power and water
industry to foreign investment to share the costs.

April 25, 2001
Houston Chronicle
Bill could force refund from Reliant
PUC would have power to order profits returned
By JANET ELLIOTT
Copyright 2001 Houston Chronicle Austin Bureau
AUSTIN -- Reliant Energy customers could get refunds of up to $590 each under
legislation the utility industry is fighting.
Rep. Sylvester Turner, D-Houston, and other supporters of House Bill 2107
held a news conference Tuesday to counter intense lobbying against the bill
giving the Public Utility Commission of Texas the authority to order excess
earnings refunded. Turner said the utilities recently took the unusual step
of holding a luncheon for legislative staffers to "trash the bill."
"If HB 2107 does not pass, the Legislature will allow utilities to enjoy the
benefits of the regulated market and the windfall of the restructured market
at the expense of ratepayers," he said.
The lawmakers announced that Enron and Shell, two companies entering the
electricity market, are supporting the bill, which may be debated by the full
House next week. They join the city of Houston and business and industrial
electricity customers backing the bill.
Turner said the backing of Enron and Shell shows that the legislation is
pro-competition, not anti-business as the utilities are saying.
Turner said data compiled by the Public Utility Commission showed that
Reliant, TXU Electric and three other investor-owned utilities have been
allowed to overcharge customers $4.9 billion under the state's 1999 electric
deregulation bill. Reliant's overcharges are estimated at $2.2 billion.
Utility companies say they are against the bill because it's too soon to say
if the market forces that have turned nuclear and coal-fired plants into
valuable properties will last.
"Reliant Energy does not support the bill as proposed because the bill would
require utilities to make payments to customers based on an estimate of
stranded costs, and we believe that the only way to determine the true value
is through market valuation, which will take place in 2004," said Alicia
Dixon, a spokeswoman for the utility.
Utilities may be reaping a windfall because of changes in the electricity
market that weren't anticipated when lawmakers passed the restructuring bill
last session. Utilities were allowed to keep rates artificially high because
of concern that a competitive market would not allow them to recover
"stranded costs" -- mainly the value of nuclear plants and coal-fired plants
that at the time were more expensive producers of power than natural
gas-fired plants. But in the past two years, rising natural gas prices have
made nuclear- and coal-powered facilities more valuable because their fuel
costs are relatively stable.
The PUC has said that the situation has resulted in extra profits for
utilities, but it does not have the power to change portions of the law
allowing the utilities to collect billions to cover stranded costs.
At a legislative committee hearing last month, Reliant Energy Delivery Group
Senior Vice President Steve Schaeffer said that rate likely would have been
reduced 6 percent last year without the stranded cost recovery provisions in
the restructuring bill.
Reliant Energy has reported strong profits, but that included gains from
unregulated operations outside Texas.
"They're not hurting at all, and we don't want to hurt them. We just want to
do what is fair to the ratepayers," said Rep. Kevin Bailey, D-Houston, a
co-sponsor of the bill.
Turner said he hopes to begin discussions with utility representatives the
week. And he says he is willing to compromise for refunds of less than $590
so long as the amount is enough to help customers struggling with rising
bills.
Reliant bills this summer are expected to be 30 percent higher because of
increased fuel prices at electric plants. Utilities are allowed to pass
through increased natural gas costs under the current regulation and will
continue to be able to do so after the market opens in January.
About half of Reliant's electricity is generated by gas-fired plants, and the
rest comes from coal and nuclear generators.
The deregulation bill allows the utilities to keep any excess earnings until
2004, when they can be returned.
But Turner said he is worried that utilities will find some way to create
stranded costs. For example, Reliant is splitting into two companies -- a
regulated "wires" company to handle electricity transmission and an
unregulated company to buy and sell electricity.
"They're dumping all their costs on the regulated company, which makes it
unattractive," Turner said.

National Desk; Section A
Signaling Change, Bush Picks 3 Executives for Pentagon Jobs
By JAMES DAO

04/25/2001
The New York Times
Page 15, Column 3
c. 2001 New York Times Company

WASHINGTON, April 24 -- President Bush signaled his intention to impose a
more corporate management style on the Pentagon bureaucracy today by
nominating three business executives -- two of them from the weapons industry
-- to be the secretaries of the Army, Navy and Air Force.
Mr. Bush and his secretary of defense, Donald H. Rumsfeld, have argued that
the military must be more efficient in buying weapons and providing health
care, housing and other services to its personnel. For that reason, today's
announcement was widely viewed as a first step toward new management
policies, including privatizing services.
The nominees ''have been persistent advocates of outsourcing, relying more on
the marketplace and re-engineering the core military functions so they
perform more efficiently,'' said Loren Thompson, chief operating officer of
the Lexington Institute, a military analysis group.
But the announcement drew criticism from watchdog groups because two nominees
-- Gordon R. England, Mr. Bush's choice for Navy secretary, and James G.
Roche, chosen to run the Air Force -- come from military contractors that
sell billions of dollars of equipment to the armed forces.
Mr. Roche is a corporate vice president with the Northrop Grumman
Corporation, which builds aircraft and electronics equipment, including the
Global Hawk, an unmanned reconnaissance plane that is widely praised by some
Bush advisers. The company also hopes to sell more B-2 bombers -- at a cost
of at least $500 million each -- to the Air Force.
Mr. England is executive vice president of the General Dynamics Corporation,
a highly diversified company that makes items like grenades, armored vehicles
and communications equipment.
The company's divisions include Electric Boat in Groton, Conn., which is
building a new class of attack submarines for the Navy, and the Bath Iron
Works in Maine, which builds Arleigh Burke destroyers and is competing to
build a new class of destroyer known as the DD-21.
Mr. Bush's nominee for secretary of the Army, Thomas E. White, is the vice
chairman of Enron Energy Services, a division of the Enron Corporation, the
Texas energy company that was a leading contributor to Mr. Bush's campaign
last year.
''I'm troubled that we're setting the stage for promoting the interests of
the military-industrial complex,'' said Eugene Carroll, a retired admiral who
is vice president of the Center for Defense Information, a nonprofit policy
group. ''I see no inclination on the part of the Bush team to rein in our
military programs.''
But other military analysts said that corporate executives could bring the
kinds of business skills needed to shake up a stodgy and inefficient Pentagon
bureaucracy.
''Who better to know how the business runs than those who have run the
business?'' said Jack Spencer of the Heritage Foundation, a conservative
policy organization.
Mr. Roche served in the Navy for 23 years. Before joining Northrop Grumman in
1984, he worked as the Democratic staff director for the Senate Armed
Services Committee and was assistant director of the Pentagon's Office of Net
Assessment, which formulates policy, in the Ford and Carter administrations.
Mr. White, a West Point graduate, served in the Army for 23 years, retiring
as a brigadier general. He was executive assistant to General Colin L.
Powell, then the chairman of the Joint Chiefs of Staff, from 1989 to 1990. He
joined Enron in 1990.
Mr. England joined General Dynamics in 1980 and has served in several senior
positions, including director of avionics and president of the land systems
division.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Financial
Stocks Fall Back After Profit Reports
Associated Press

04/25/2001
The Washington Post
FINAL
E03
Copyright 2001, The Washington Post Co. All Rights Reserved

NEW YORK, April 24 -- Stocks gave up early gains and closed moderately lower
today as poor earnings reports weighed on investors, prompting them to again
cash in recent profits.
Throughout the day, investors were torn between their newfound optimism about
earnings and the economy and fears that it will be much longer before the
business environment improves.
The Dow Jones industrial average fell 77.89, to 10,454.34. Investors became
more cautious as the session progressed, pulling back after sending the
average up as much as 106.83.
Broader indicators also finished lower. The Nasdaq composite index fell
42.71, to 2016.61, but it is still up 23 percent from its low for the year of
1638.80, reached April 4. The Standard & Poor's 500-stock index fell 14.89,
to 1209.47.
Analysts expected the decline after last week's big rally in which the Dow
gained 453 points and the Nasdaq picked up 202.
"We did make a pretty giant leap. I think we are just consolidating," said
Steven Goldman, market strategist for Weeden & Co.
He and other analysts also said the profit-taking had little to do with a
report by the Conference Board that consumer confidence dropped significantly
in April. Investors believe the decline should give the Federal Reserve
greater incentive to lower interest rates for the fifth time this year when
its policymaking Open Market Committee meets in mid-May.
Wall Street, which last week ended its two best weeks of the year on positive
earnings news and an unexpected interest rate cut by the Fed, is having
conflicted emotions about the economy -- while hoping that business and
earnings will turn around soon, investors also are fearful that a recovery
could take much longer.
"Fed rate cuts are pluses for the economy, but they take time to work their
way through the system," said Alan Ackerman, executive vice president of
Fahnestock & Co.
Investors sold companies that posted disappointing profits. Consumer-products
maker Kimberly Clark plunged $6.17, to $56.61, on news that it missed
earnings expectations by a penny a share.
JDS Uniphase tumbled $3.36, to $20.82, after announcing that it would
restructure its business, laying off 20 percent of its workforce and closing
several operations. Although earnings for its fiscal third quarter met
forecasts, the company said it expects a fourth-quarter profit of 5 cents a
share, 7 cents shy of expectations.
When investors bought stocks today, they did so with caution, gravitating
toward some of the market's safest sectors, such energy issues. Enron rose 22
cents, to $61.87.
Investors also rewarded companies that posted better-than-expected profits.
DuPont, a Dow stock, rose 67 cents, to $44.80, on earnings that beat
expectations by 3 cents a share.
Other Indicators
* The New York Stock Exchange composite index fell 4.80, to 613.97; the
American Stock Exchange index fell 0.67, to 902.87; and the Russell index of
2,000 small stocks rose 1.28, to 462.35.
* Declining issues matched advancing ones on the NYSE, where trading volume
advanced to 1.22 billion shares, from 1.03 billion on Monday. On the Nasdaq,
decliners outnumbered advancers by 11 to 10 and volume totaled 1.93 billion,
up from 1.8 billion.
* The price of the Treasury's 10-year note fell $1.56 per $1,000 invested,
and its yield rose to 5.2 percent, from 5.18 percent late Monday.
* The dollar rose against the Japanese yen and the euro. In late New York
trading, a dollar bought 122.25 yen, up from 121.25 yen late Monday, and a
euro bought 89.42 cents, down from 89.62 cents.
* Light, sweet crude oil for June delivery settled at $26.82 a barrel, down
79 cents, on the New York Mercantile Exchange.
* Gold for current delivery rose to $264.10 a troy ounce, from $263.10 on
Monday, on the New York Mercantile Exchange's Commodity Exchange.

http://www.washingtonpost.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

India State Ready To Pay Enron Unit For March

04/25/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BOMBAY (AP)--The Maharashtra state power utility said Wednesday it would pay
outstanding electricity bills for March as part of an ongoing dispute over
tariffs with the American power giant, Enron Corp. (ENE).
"We will make the payment of 1.34 billion rupees ($1=INR46.83) today for the
March bill. The February bill of INR1.1 billion was already paid up last
month," Krishna Rao, a member of the Maharashtra State Electricity Board,
told The Associated Press.
"As far as we are concerned there are no more payments outstanding."
An Enron spokesman confirmed receipt of the February dues, but said the
company is also due $48 million for nonpayment of electricity bills for
December and January.
The state electricity board has said the December and January bills should be
offset against a fine of INR4 billion rupees it had levied against Enron for
non-supply of power during that period.
Meanwhile, the state's Chief Minister Vilasrao Deshmukh told reporters a
committee would be formed in two days to renegotiate a power purchase
agreement, or the rate at which the state buys power from Enron.
Enron has been under fire from Bombay politicians who say its power charges
are unaffordable. Politicians say costs have increased fourfold from four
cents per unit agreed in 1995 for the two-year-old, 740-megawatt naphtha
plant.
Prices shot up to 15 cents per unit following worldwide fluctuation of oil
prices and depreciation of the Indian rupee.
Enron maintains that a 1,444 megawatt liquefied natural gas plant to be
commissioned later this year will lower tariffs.
Also Wednesday, Indian newspapers reported that a proposal by the Enron board
in London to issue a termination notice to the state electricity board had
been temporarily shelved.
"Indian financial institutions are reported to have successfully persuaded
offshore lenders that there was no need to issue a termination notice right
now," The Economic Times newspaper reported.
Krishna Rao, of the state electricity board, said a termination notice at
this stage would not be in anyone's interest.
"Enron will tie itself in knots if a termination notice is issued. It is not
good business sense and not in anybody's interest," said Rao.
India's largest foreign investment, $3 billion Enron power project has been
in trouble since December, when the state government said it would review the
price agreement with Dabhol Power Corp., Enron's Indian subsidiary.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Law minister: India's court system hindering economic progress
By NEELESH MISRA
Associated Press Writer

04/25/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

NEW DELHI, India (AP) - India's law minister urged the country's courts
Wednesday to help economic reforms flourish, and not obstruct them by
entertaining a barrage of cases against Indian and foreign companies.
"Don't interfere in every matter just because somebody has brought an
invitation for you to interfere," Arun Jaitley, the minister for law, justice
and company affairs, said in an address before hundreds of business leaders.
"Major projects cannot be held up because of judicial cases. Delays and lack
of interest are the result," said Jaitley, who is a lawyer by profession.
India's courts, clogged by millions of pending cases, are notorious for
delays in judgment. Several top international and domestic companies have
also been adversely affected by court rulings on petitions by environmental
and labor activists and other voluntary groups.
More than 21,000 cases are pending in the Supreme Court, with each judge
hearing more than 800 cases. In the state high courts, more than 3.4 million
cases are still to be decided on, Jaitley said. The number of pending cases
before the subordinate courts has remained stagnant at 20 million for the
last five years, he said.
A dlrs 4.5 billion dam project across the Narmada River was delayed for four
years because of a flurry of litigation by environmental activists. The
objections were finally overruled by the Supreme Court.
Last year, the U.S. power company Cogentrix, based in Charlotte, North
Carolina, abandoned a dlrs 1.3 billion, 1,000-megawatt electricity project in
the southern state of Karnataka after legal wrangles delayed the project by
seven years.
"We have seen cases in which investment was delayed by half a dozen
litigations and finally the investor said, `I don't want to invest, thank
you,"' Jaitley said. He was speaking at the annual conference of the
Confederation of Indian Industry, an influential industry group.
The wrangles have hampered private electricity generation in India, which
needs an additional 100,000 megawatts of power per year said Power Minister
Suresh Prabhu, speaking on the same conference.
Jaitley said that the government and courts had tried to enlarge their
jurisdiction into areas traditionally outside their control.
He mentioned the changes in economic policy that have swept the country since
Prime Minister P.V. Narasimha Rao's government started unshackling controls
on the socialist-style economy in 1991.
"... We need to tune ourselves to the changes taking place in the commercial
world," he said.
A dlrs 3 billion project of the American energy giant Enron, India's
biggest-ever foreign investment, is currently facing problems with the
government-run utility in the western Maharashtra state, which says the power
generated by Enron is too expensive compared to prevalent local prices. The
state wants to renegotiate the contract.
Jaitley also gave the example of 800,000 cases related to bounced checks -
litigation that he said did not need years to be decided in courts. He said
there were also too many vacancies in judicial appointments.
(nnm/lak)

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Indian state ready to pay Enron bill for power
By RAMOLA TALWAR BADAM
Associated Press Writer

04/25/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

BOMBAY, India (AP) - The Maharashtra state power utility said Wednesday it
would pay outstanding electricity bills for March as part of an ongoing
dispute over tariffs with the American power giant, Enron.
"We will make the payment of 1.34 billion rupees (dlrs 28.5 million) today
for the March bill. The February bill of 1.1 billion rupees (dlrs 23.4
million) was already paid up last month," Krishna Rao, member of the
Maharashtra State Electricity Board, told The Associated Press.
"As far as we are concerned there are no more payments outstanding."
An Enron spokesman confirmed receipt of the February dues, but said the
company is also due dlrs 48 million for nonpayment of electricity bills for
December and January.
The state electricity board has said the December and January bills should be
offset against a fine of 4 billion rupees (dlrs 85.31 million) it had levied
against Enron for non-supply of power during that period.
Meanwhile, the state's Chief Minister Vilasrao Deshmukh told reporters a
committee would be formed in two days to renegotiate a power purchase
agreement, or the rate at which the state buys power from Enron.
Enron has been under fire from Bombay politicians who say its power charges
are unaffordable. Politicians say costs have increased fourfold from four
cents per unit agreed in 1995 for the two-year-old, 740-megawatt naphtha
plant.
Prices shot up to 15 cents per unit following worldwide fluctuation of oil
prices and depreciation of the Indian rupee.
Enron maintains that a 1,444 megawatt liquefied natural gas plant to be
commissioned later this year will lower tariffs.
Also on Wednesday, Indian newspapers reported that a proposal by the Enron
board in London to issue a termination notice to the state electricity board
had been temporarily shelved.
"Indian financial institutions are reported to have successfully persuaded
offshore lenders that there was no need to issue a termination notice right
now," The Economic Times newspaper reported.
Krishna Rao, of the state electricity board, said a termination notice at
this stage would not be in anyone's interest.
"Enron will tie itself in knots if a termination notice is issued. It is not
good business sense and not in anybody's interest," said Rao.
India's largest foreign investment, the dlrs 3 billion Enron power project
has been in trouble since December, when the state government said it would
review the price agreement with Dabhol Power Corp., Enron's Indian
subsidiary.
(rtb/lak)

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

INDIA: Enron action tarnishes India's investment image.

04/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW DELHI, April 25 (Reuters) - India, already a black hole when it comes to
foreign investment, cannot afford the headlines it's grabbing now: news
Houston-based energy giant Enron may be bailing out of an almost complete
$2.9 billion power project.
Unable to collect $48.3 million for power supplied to a virtually bankrupt
Indian state electricity board - even after invoking state and federal
government guarantees - Enron this week asked creditors to approve taking
steps toward terminating the project.
Analysts warn the action is likely to further tarnish India's lousy image as
a place to invest, causing direct foreign investment (FDI) to decline from a
trickle to a drip.
"Foreign investments may dry up because of Enron," says Gajendra Haldea,
senior consultant at the National Council for Applied Economic Research.
The amount multinational corporations (MNCs) invest in India has been low.
India attracted just $2.6 billion in direct foreign investment last year,
three times less than Singapore, a nation with an economy one-fourth its size
- and 250 times fewer people.
China, the one nation with a roughly comparable population and an economy
twice the size of India's, attracts 20 times more.
Due to bureaucratic delays in approving new projects, drastic changes in
government policies and regulations, and disappointing returns, foreign
direct investment in India has withered in recent years, even as FDI flows
boomed globally.
FDI inflows into India fell by 26 percent in 1998, and by another 17.7
percent the following year.
Last year global FDI flows rose an estimated 23 percent to $1.1 trillion,
according to the Economist Intelligence Unit. India's portion - $2.6 billion
or 0.24 percent.
FORGOTTEN PROMISES
The situation was a lot different a decade ago. In the early 1990s, India
looked set to turn its back on decades-long dedication to socialism and
Gandhi-inspired self-sufficiency by opening its economy to trade and foreign
investment.
The U.S. government for one reacted enthusiastically by designating India as
a "big emerging market", prompting Fortune 500 companies like General Motors,
Ford and Proctor and Gamble to draw up plans to build factories there.
But old habits die hard, and over ensuing years the impulse toward change was
stifled by political factionalism in the world's largest - and messiest -
democracy.
Ambitious plans to privatise state-run companies that dominate the petroleum,
power generation, telecommunication and airline industries foundered, often
due to opposition by labour unions.
The cost to India can be gauged by the amounts that flowed into countries
where privatisation did occur. Last year Brazil attracted $30.6 billion
primarily from the sale of state assets; in 1999, Argentina tripled its FDI
inflow, and Chile sucked in $9 billion, due largely to disinvestment.
Some Indian government officials figure Delhi could raise $20 billion within
a half year if disinvestment were pursued properly.
DISAPPOINTING RETURNS
FDI has also declined because of the disappointment felt by MNCs that have
invested in India.
An A T Kearney study of the global FDI market found that while India is
perceived as offering one of the highest potential returns on investment,
actual returns are among the lowest - lower than Africa.
With so little evidence of the benefit of investing in India, and Enron-like
evidence of the problems faced by companies which try, many multinationals
avoid the country.
About 30 percent of the top 100 transnationals have no presence in India.
Carmakers like Nissan Motors of Japan and Volkswagen of Germany, retailers
like U.S.-based Wal-Mart Stores and Royal Ahold of the Netherlands, and
metals producers like Broken Hill and Rio Tinto have no operations in India.
HOSTILE TAKEOVERS
Indian government restrictions on corporate takeovers have also caused FDI to
shrink.
There have been no hostile corporate takeovers in India since 1997, when the
government began requiring multinationals to get a no-objection certificate
from the board of an Indian takeover target. And restrictions on financing
make even friendly takeovers difficult.
As a result India has missed out on the boom in cross-border mergers and
acquisitions.
According to the Economist Intelligence Unit, cross-border M&As accounted for
about 30 percent - or $290 billion - of FDI flows last year. But in India,
only $776 million of cross-border M&As took place in 1999, down nearly 50
percent from the 1997 figure.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

India Maharashtra State Elec Bd Pays Dabhol Pwr Feb Dues

04/25/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- India's Maharashtra State Electricity Board said late
Tuesday it has made payments for electricity consumed during February to U.S.
energy major Enron Corp.'s (ENE) Indian unit Dabhol Power Co.
This follows a prolonged ongoing dispute between MSEB and the DPC over
nonpayment of electricity dues.
"We have paid Dabhol Power's bill of 1.1 billion rupees ($1=INR46.83) for the
month of February under protest. Tomorrow (Wednesday) the bill for March is
due. We have every intention of paying that bill as well which I believe will
be to the tune of INR1.34 billion," said MSEB chairman Vinay Bansal in a
telephone interview with Dow Jones Newswires.
Enron India spokesman Jimmy Mogal confirmed that MSEB had paid its February
bill.
MSEB is contesting its December 2000 and January 2001 bills of INR1.02
billion and INR1.1 billion, respectively.
For its part, MSEB said it wanted its December 2000 bill to be offset against
an INR4 billion fine it levied on Dabhol for what it said was the non-supply
of power for intermittent periods between October 2000 and the end of
January.
Dabhol and the federal government recently started a conciliation process,
governed by the provisions of the United Nations Commission on International
Trade Law, aimed at resolving MSEB's contested December power bill.
Enron has invoked a federal counter-guarantee for payment of the disputed
January 2001 bill.
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9426;
himendra.kumar@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

INDIAN COMMITTEE TO RENEGOTIATE POWER AGREEMENT WITH ENRON

04/25/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, April 25 Asia Pulse - A high-level committee comprising
representatives of the federal Government, Maharashtra Government, and
Maharashtra State Electricity Board (MSEB) will renegotiate the Power
Purchase Agreement (PPA) including cost of power with US energy giant Enron
promoted Dabhol Power Company (DPC).
"Various parameters of the contract entered into by MSEB with the DPC would
be renegotiated by a negotiating team that will be constituted in the next
2-3 days," the Maharashtra Chief Minister, Vilasrao Deshmukh, said.
The major objectives of the negotiating team would be to find ways and means
to significantly reduce the cost of power from Dabhol project so as to make
it more affordable, he said adding recommendations of the Energy Review
Committee headed by M G Godbole would serve as inputs for negotiations.
"We hope DPC would not take precipitate legal actions since the Government of
India and Maharahstra are fully seized of the problem and are exploring ways
to solve the dispute," Deshmukh said.
Deshmukh had an hour long meeting with the Finance Minister, Yashwant Sinha,
on Monday where it was decided to renegotiate the PPA with DPC.
Stating that the state cannot absorb all the power generated from 740 MW
Phase-I of DPC, the Chief Minister said the 1,444 MW Phase-II, scheduled for
commissioning by January 2002 was not needed by the state.
"Alternative solution of wheeling the Phase-II power out to energy deficit
states needs to be worked out," he added.
(PTI) 25-04 1750

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

InPlay
Enron mum on Indian project sale reports

04/25/2001
The Daily Deal
Copyright (c) 2001 The Deal LLC

Bechtel Group Inc. - General Electric Co. - Enron Corp.
Houston energy giant Enron Corp. wouldn't comment Tuesday on reports it would
consider selling its 65% stake in a $2.9 billion Indian power project at
Wednesday's board meeting in London. The 2,184 megawatt facility is in
India's western state of Maharashtra. Maharashtra State Electricity Board,
which owns 15%, told Reuters the matter is on the agenda. MSEB is expected to
send representatives, as are Fairfield, Conn. based General Electric Co. and
San Francisco based Bechtel Group Inc., which each own 10%. Enron met with
the project's lenders Monday. Enron is believed to want to sell its interest
after financially strapped MSEB failed to invest in the project's second
phase, purchase 15% of Enron's stake and defaulted on $48.2 million in
electricity payments. -Claire Poole http://www.thedeal.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

India: Babus as negotiators

04/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

The bureaucracy that fattened itself in the era of the paramountcy of the
public sector has decided to preside over the matters of disinvestment and
privatisation. The pity is that the nation will be called to foot the bill
for every error of the 'Babu Negotiator Brigade' that was a disaster in the
Socialist era, and is turning out to be more disastrous in India's transition
to an open society, says Sharad Joshi.
"ALL decisions in economic planning are, mathematically speaking, in the
nature equalising the marginal rates of substitution between any two
commodities or factors of production in different uses...", Fredrick Hayek
brought out in his path-breaking article, 'The Use of Knowledge in Society'
(American Economic Review XXXV, No. 4; September, 1945).
If we possess all relevant information and if we can start out from a given
system of preferences and have complete knowledge of all available means, the
problem of optimum allocation by itself does not present any serious
difficulties. But that is not the crux of the economic problem. The economic
calculus developed by several eminent economists is potent enough apparatus
to resolve the logical workout. The real crux of the problem lies in the
predicament that the knowledge of the circumstances in perpetual change
exists, not as concentrated or integrated aggregate data but as dispersed,
incomplete and often contradictory bits of knowledge in the possession of
separate persons placed generally in the thick of markets and industry. The
highly fluid and dialectical information they accumulate over years and
update continuously is the kind of knowledge required for the application of
economic calculus. This knowledge is not transmissible in a statistical
format the locationally distant and functionally detached Central planning
authorities require for their decision-making processes.
Planning, therefore, becomes an exercise in application of increasingly
sophisticated calculus to progressively relevant knowledge database.
Hayek's postulation was the first concrete demonstration of why all Central
planning must fail. India was not listening to the likes of Hayek at the
epoch and was treading its weary socialist way inebriated by the doctrines of
Harrod- Domar, Frisch, Lange and Mahalnobis. Hopefully, that debate stands
resolved now, never mind that there are a few leftists who continue to
believe in the superiority of Central planning, and dream of the return of
the licence-quota-permit Raj and the end of the spectre of liberalisation and
the WTO.
The contradiction between the knowledgeable grassroots operators and the
commissars feeding on statistical aggregates is coming to the fore in another
context.
Balco dealings, Enron tractations and negotiations around the WTO table on
the Agreement on Agriculture (AoA) and Trade Related Intellectual Property
Rights (TRIPs) bring into straight confrontation, professionals from the
private sector, the multinationals and governmental delegations from
developing countries. That is a cruel encounter between opponents of entirely
different ilks and bouts, between two very unevenly matched sides. That ought
to provoke protests from Humanists and Animal lover groups.
On the one hand, people who have been in the trade and on the floor for
decades and developed finely tuned sixth and even seventh senses that permit
them to sense even the remotest consequences of any proposal from the other
side - briefly, Hayek's 'knowledge people'. Top it up with the additional
gifts of articulation skills that come from varied exposure and decades of
practice.
Add further to boot, training in the fines and even less couth arts of
diplomatic maneouvres that permit them to see the smallest chink in the
opponents' armour and wee bits of vanity, gullibility and vulnerability in
the members of the opposite delegations and the alacrity to pounce on it; as
if this were not enough, they are a highly motivated group who stand to
benefit or lose by the outcome of the parleys.
Facing these formidable gladiators is your big babu with a university degree
that has little practical utility, no experience of trade or of the floor,
and brief administrative experience limited to handling the irrelevant
'aggregates', and who is personally quite indifferent to the outcome of the
tractation, except to the extent that they provide chances of foreign jaunts,
shopping and banking.
No wonder Rebecca Marks can carry everything before them. Not surprising that
the Maharashtra State Electricity Board officials end by overpaying hundreds
of crores of rupees they need not have conceded.
The Balco deal comes a copper and, in the WTO, India ends by committing
itself to abolition of QRs, unable to foresee the contingency of favourable
balance of payments and omitting to make reservations for geographic
appellations for 'Darjeeling' tea and 'Ratnagiri' Alphanso on a par with
Scotch whisky and Champagne bubbly wine.
The bureaucracy that fattened itself in the era of the paramountcy of the
public sector has decided to preside over the process of disinvestment and
privatisation and arrogate to itself full powers for negotiating in the WTO,
rather than associating the floor-level people from the trades and fields
concerned, and is now being made mince-meat of by the highly motivated and
skilled professionals.
The pity is that the nation will be called to foot the bill for every error
of the 'Babu Negotiator Brigade' that proved to be a disaster in the
socialist era as Babu commissars, and are turning out to be even more
disastrous in the transition to an open society.
(The author is Chairman of the Task Force on Agriculture, Government of
India. The views expressed are personal.)

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Business; Financial Desk
Markets / Your Money Poor Earnings Reports Drag Markets to Moderate Losses
From Times Wire Services

04/25/2001
Los Angeles Times
Home Edition
C-4
Copyright 2001 / The Times Mirror Company

Major stock indexes gave up early gains and closed moderately lower Tuesday
as poor earnings reports weighed on investors, prompting them to again cash
in recent profits.
Throughout the day, investors were torn between their newfound optimism about
earnings and the economy and fears that it will be much longer before the
business environment improves.
The Dow Jones industrial average lost 77.89 points, or 0.7%, to close at
10,454.34. Investors became more cautious as the session progressed, pulling
back after sending the Dow up as much as 106.83 points earlier.
Wall Street's broader indicators also finished lower. The Nasdaq composite
index fell 42.71 points, or 2.1%, to 2,016.61, but it is still up 23% from
its low for the year of 1,638.80, reached April 4.
The Standard & Poor's 500 index fell 14.89 points, or 1.2%, to 1,209.47. The
loss put the S&P 500 back into bear market territory, defined as a loss of
20% or more from a recent peak.
Despite the declines in the indexes, the overall picture was less bleak.
Advancing stocks actually led declining issues by a razor thin margin on the
New York Stock Exchange, while decliners led advancers by a 10-9 margin on
the Nasdaq Stock Market. Trading was active on both markets.
Analysts expected the market to pull back after last week's big rally, which
saw the Dow gain 452 points and Nasdaq pick up 201.
"We did make a pretty giant leap. I think we are just consolidating," said
Steven Goldman, market strategist for Weeden & Co.
He and other analysts also said the profit taking had little to do with a
report by the Conference Board that consumer confidence dropped significantly
in April. Investors believe the decline should give the Federal Reserve
greater incentive to lower interest rates for the fifth time this year when
its policymaking Open Market Committee meets in mid-May.
Wall Street, which last week ended its two best weeks of the year on positive
earnings news and an unexpected rate cut by the Fed, is having conflicted
emotions about the economy--while hoping that business and earnings will turn
around soon, investors also are fearful that a recovery could take much
longer.
"Fed rate cuts are pluses for the economy, but they take time to work their
way through the system," said Alan Ackerman, executive vice president of
Fahnestock & Co.
Investors sold companies that posted disappointing profits. Consumer products
maker Kimberly-Clark plunged $6.17 to close at $56.61 on news it missed
earnings expectations by a penny a share.
JDS Uniphase tumbled $3.36 to $20.82 after announcing it would restructure
its business, laying off 20% of its work force and closing several
operations. Although earnings for its fiscal third quarter met forecasts, the
company said it anticipates fourth-quarter profit to be 5 cents a share, 7
cents shy of expectations.
Another victim of poor earnings: Compaq Computer. The computer maker's
first-quarter results were a penny below already lowered expectations. The
stock slid 15%, losing $3.15 to $17.50. Dell Computer also fell, losing $3.50
to $25.85. The Philadelphia Computer Box Maker index ended the day off 3.8%.
When investors bought stocks Tuesday, they did so with caution, gravitating
toward some of the market's safest sectors, such as energy issues. Enron rose
22 cents to $61.87.
Investors also rewarded companies that posted better-than-expected profits.
DuPont, a Dow stock, rose 67 cents to $44.80 on earnings that beat
expectations by 3 cents a share.
In overseas markets, Argentine stocks rose after a three-day drop as the
nation's $1-billion bond sale renewed optimism the government would be able
to raise financing to make debt payments.
Argentina's Merval index rose 2.1% to 420.32.
Argentina, mired in recession, on Monday sold $1 billion in three-year
promissory notes to banks and other companies to help pay $6.2 billion in
debt coming due in the next four months. That helped build confidence that
the cash-strapped country would be able to roll over maturing debt.
*
Market Roundup, C7, C8

GRAPHIC-CHART: Daily Diary: Tuesday, April 24, 2001;

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Aquila Shares Rise 24% After IPO Raises $420 Million (Update1)
2001-04-24 11:08 (New York)

Aquila Shares Rise 24% After IPO Raises $420 Million (Update1)

     (Updates share price. Adds planned spinoff in sixth
paragraph.)

     Kansas City, Missouri, April 24 (Bloomberg) -- Aquila Inc.
shares rose as much as 24 percent after the electricity and
natural-gas trader owned by UtiliCorp United Inc. raised
$420 million in its initial public offering.
     Aquila shares rose $3.60 to $27.60 in late-morning trading,
up from the initial price of $24. They traded as high as
$29.80. Shares of UtiliCorp, the third-largest U.S. utility owner,
rose 7 cents to $35.46. They had risen 87 percent in the past
year.
     UtiliCorp sold 17.5 million shares of Aquila yesterday to
take advantage of investor interest in energy traders and
generators. Shares of Atlanta-based trader Mirant Corp. have risen
59 percent since their debut in September. Minneapolis-based NRG
Energy Inc., which builds and runs power plants, has more than
doubled since selling stock in May.
     The Aquila sale, through Lehman Brothers Holdings Inc. and
Merrill Lynch & Co., is one of the few new offerings favored by
investors. The Nasdaq Composite Index had fallen 41 percent in the
past year, limiting new offerings by computer-related companies.
Aquila is among 25 companies to go public so far this year,
compared with 179 a year ago.
     Aquila's profit last year more than doubled to $98 million
from the previous year. Aquila and UtiliCorp are based in Kansas
City, Missouri.

                         Spinoff Next Year

     UtiliCorp will get $119 million after expenses in the stock
sale, and Aquila will get $273 million, Aquila said in a corporate
filing. UtiliCorp keeps control of Aquila with about 81 million
shares and 98 percent of voting rights. UtiliCorp intends to spin
off its stake in Aquila to UtiliCorp shareholders in about a year,
company spokesman Ethan Hirsh said.
     Wide swings in energy prices and a surge in gas demand have
boosted energy traders' first-quarter profits. Houston-based
Dynegy Inc.'s profit rose 73 percent, and Charlotte-based Duke
Energy Corp.'s profit rose 54 percent. Sales of Enron Corp. the
largest energy trader, almost quadrupled to $50.1 billion, and
profit rose 20 percent.
     Reliant Resources, a unit of Reliant Energy Inc. that buys
and runs power plants, is planning an IPO through Goldman, Sachs &
Co. next week. It increased the sale to $1.46 billion from
$1.3 billion to meet demand.
     Aquila has business in the U.S., the U.K., Germany, Norway,
and Spain. It also trades communications bandwidth. In eight U.S.
states and Jamaica, it owns or controls power plants that can
generate 2,013 megawatts, or enough power to light about 2 million
U.S. homes. In Illinois and Missouri, it plans to complete plants
next quarter that can generate 894 megawatts.
     UtiliCorp sells power to 4 million customers in the U.S.,
Canada, New Zealand, and Australia. It also installs and runs
cable-television and fiber-optic networks. UtiliCorp raised
$288.7 million in a secondary offering of 10 million shares a
month ago.
     UtiliCorp will use money from the Aquila sale to buy
utilities and networks outside the U.S., Chief Financial Officer
Peter Lowe said in an interview this month.

A Bandwidth Glut Exists in the Long-Haul Market, but a Shortage Exists in the
Metro and Access Markets

04/24/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

BOSTON, April 24 /PRNewswire Interactive News Release/ -- IGI Consulting's
(IGIC) recent "Bandwidth Glut: Fact or Fiction" Conference held last week in
Boston challenged attendees and speakers to define and defend their position
on whether the markets suffer from either too much or too little bandwidth.
The interactive sessions encouraged debate, and presenters found themselves
passionately defending their individual positions. Despite the difference of
opinions, the overall message conveyed by both presenters and attendees was
that a bandwidth glut exists in the terrestrial long-haul and submarine cable
markets, while a bandwidth shortage exists in the metro and access markets.
But this conclusion was not easily reached.
On the first day of the conference, Andrew Odlyzko, the Head Mathematics and
Cryptography of AT&T Labs, armed with concrete data, and a believer that a
fiber glut exists, showed that Internet traffic is doubling every year, not
every three to four months as is often quoted in the trade press. On the
surface, smashing the Internet traffic myth seemed damaging; however,
Odlyzko's conclusion, that "Internet traffic is growing vigorously but only
about doubling every year," is still optimistic. It solidifies the concept
that the Internet "may fundamentally change relationships between buyers and
sellers, producers and consumers," which was discussed by the FCC's Chief
Economist Gerald Faulhaber during his morning keynote address.
Appearances are deceptive, even when it pertains to a discussion of the
bandwidth glut. Dr. Paul Polishuk, President of IGIC, pointed out that
"existing bottlenecks in the Access and Metro markets cause concerns of a
capacity glut." He pointed out that this capacity glut is deceptive, because
the bottleneck is directly attributed to a bandwidth shortage, not a
bandwidth glut. For evidence to support his opinion, he said that when
broadband services, such as xDSL, cable modems, and fixed wireless are more
widely deployed, the bottleneck will grow and the bandwidth shortage will be
very clear.
Mool Singhi, the Director of Network Planning and Forecasting for Global
Crossing, concurred with Dr. Polishuk that appearances are indeed deceptive.
Singhi, referring to the submarine cable market, said that "what appears to
be a glut is actually an industry inventory management process." In fact, he
said, "supply should always be higher than demand" in order to provide
maximum service to bandwidth buyers. One of the chief reasons a glut is
perceived in the submarine cable industry is that announced design capacity
is mistakenly interpreted as available capacity. "It takes huge amounts of
capital to convert design capacity into available capacity," Singhi said, a
process that may take years if the capacity is needed.
Other issues in the submarine cable industry were also discussed. One of the
most provocative statements introduced was from America's Network March 1,
2001 edition: "Industry insiders admit that announcements of 6 to 8 Tbps
cable systems are designed to discourage competitive entry ... .it is
doubtful that all those systems will be built." Even if they are built, that
capacity may never be lit, because of the prohibitive costs involved.
The submarine cable industry also came under fire at the conference's
bandwidth trading panel discussion. Grant Zimmerman, a bandwidth broker for
Enron Broadband Services, said that he has "20 sellers for every buyer on the
New York to London cable." In fact, the IRU price of a Transatlantic STM-1
has dropped to "$850,000 from $8.5 million in 1998," according to Tim
Stronge, Director of Research for TeleGeography. Stronge also cited data from
TeleGeography's recent report that shows Transatlantic route capacity will
reach 12 Tbps in 2005, and Transpacific route capacity will reach16 Tbps in
that same year. "Supply is leading demand in the early years in major ocean
crossings," Global Crossing's Mool Singhi concluded.
In the metro network, attendees and speakers agreed a bandwidth shortage
exists and that Tier 1 cities are better served than Tier 2 and Tier 3
cities. Bob DeRosa, Vice President of Marketing at American Fiber Systems,
said there is "no glut in the metros, because of prohibitive construction
costs and a complicated process that involves permits and rights of way."
An alternative metro solution that was not discussed is Free-Space Optics
(FSO). FSO is an upcoming topic in IGIC's Photonics Briefings Series. The FSO
conference will be held on May 9th in Boston. FSO and fixed wireless are
still options available to carriers that want to solve the last mile problem
in metro areas. FSO in particular, with speeds up to 2.5 Gbps, can complete a
carrier's metro fiber ring at wireline speeds. FSO in Metro Optical Networks
will be the topic of the keynote on May 9th.
Metro connectivity is robust in the major markets across the US. According to
Telegeography, 23 of the major markets in the US have more than 14 network
options. Of course, Tier 2 and Tier 3 cities are not as bandwidth rich. Their
options are limited. On the surface, the major markets seem well served, but
it is an industry axiom that only 5 percent of all businesses in the US have
fiber to the building, leaving the other 95 percent with a fiber shortage.
Finally, the idea that there is a bandwidth glut was expanded into other
areas of the market by Mark Langley, Research Director of Epoch Partners. He
asks, is there a carrier and equipment manufacturer glut in addition to a
bandwidth glut? On the bandwidth glut question, Langley concurred with other
attendees that some fiber routes are commoditized, and some are not. For
evidence of an equipment manufacturer glut, Langley said that Epoch estimates
that more than 25 companies are pursuing optical integrated circuits and more
than 60 companies are focused solely on MEMS. His conclusion: The industry is
ripe for consolidation, driven by the carriers' choice of "best of breed"
technologies over end-to-end solutions. On the carrier glut issue, Langley
said that lack of access to capital limits carrier build-out strategies and
that "investors are putting established and emerging carriers on a level
playing field." The bottom line: "earnings matter."
What matters to IGIC is that attendees and speakers at the Bandwidth Glut
Conference held last week were treated to stimulating sessions, interactive
debates, and to industry intelligence that will help improve their
investments and business models. If you or your company is interested in
taking an in- depth look at relevant topics, research IGIC's Photonics
Briefings Series and check out our website at www.photonicsbriefings.com or
www.igigroup.com for our upcoming schedule. Conference proceedings from the
Bandwidth Glut Conference, as well as for all our briefings, are also
available. IGIC's position is that opportunities still exist in the telecom
industry, and that if Internet traffic is doubling every year, that's a huge
opportunity for entrepreneurs, equipment manufacturers, carriers, investors,
and other telecom executives. Contact:
Dr. Hui Pan
Chief Economist
IGI Group, Inc.
617-232-3111
hpan@igigroup.com
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X37837607

/CONTACT: Dr. Hui Pan, Chief Economist of IGI Group, Inc., 617-232-3111,
hpan@igigroup.com/ 14:40 EDT

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Businesses back bill to refund Texas utility customers billions
By LISA FALKENBERG
Associated Press Writer

04/24/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

AUSTIN (AP) - Two business heavyweights, Enron and Shell, are backing a bill
that would force utilities to refund customers about $4.9 billion in
overcharges allowed under the electric deregulation law passed last session.
The bill's author Rep. Sylvester Turner, D-Houston, announced the alliance
Tuesday, saying he hoped it would convince his colleagues that his bill isn't
antibusiness.
"It's not just legislators versus businesses," Turner said of his bill. "This
is a pro-business bill if it's pro-competition."
Enron and Shell are competitors of the utilities that would be forced give
refunds. The bill also helps Enron and Shell lower the cost of doing
business.
Under Turner's bill, a residential customer in TXU Electric & Gas's service
area would get a refund of $481 while a residential customer in Reliant
Energy Inc.'s service area would get $590, about five times the amount in
state and property tax breaks granted last session, Turner said.
About 2.3 million Texans are residential customers of TXU while 1.5 million
are residential customers of Reliant. Customers of municipalities or electric
cooperatives would not get refunds. Refund estimates include money rate
payers have paid and are expected to pay.
Turner said he expects lawmakers to debate the bill in the House early next
week, after he conducts negotiations with the utilities that oppose the bill.
"It gives back to the rate payers their money," Turner said of the bill. "And
they're in a better position to decide what to do with their money than
regulated utilities."
Utilities have argued that they don't owe the refunds. A TXU official has
said refunding customers now might mean rate increases later if the market
takes a different turn.
"Customers would be ill-served by any refund now which would be based on a
PUC estimation model using incomplete and inaccurate data," Tom Baker,
president of TXU, has said.
The disagreement over the refunds stems from the deregulation law, which
allows utilities to charge customers higher-than-necessary rates to make up
for money they were expected to lose through investments in nuclear power and
coal plants. Those plants were expected to lose value in an unregulated
market.
But soaring natural gas prices made gas-fired power plants more expensive to
operate, increasing the value of nuclear power and coal plants, and resulting
in extra profits for utilities.
The utility commission would have the authority to decide if and how a
repayment could be reimbursed to the customers under the bill.
Most utilities argue that it is too early to determine what their costs will
be and that under the deregulation laws, Texas utilities have until 2004 to
determine it.
Electric deregulation starts Jan. 1. A pilot program begins in June.
But Turner and others say that if the companies are not forced to return the
excess earnings now, they will find a way in 2004 to make sure that they do
not have to return money to consumers then.
"If you allow them to hold on to it in 2000 to 2004, it will not be there,"
Turner said. "People are saying we need help on our utility bills right now."
PUC Chairman Pat Wood has said that estimates show that gas prices will stay
high, keeping the value of other power plants high as well.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Starwood Hotels Meets 1Q Despite Economy, 2Q Views Cut
By Janet Morrissey
Of DOW JONES NEWSWIRES

04/24/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Starwood Hotels & Resorts Worldwide Inc. (HOT) managed
to stave off the worst effects of the economic downturn in the first quarter
as the company posted quarterly results in line with analysts' projections.
However, the weak economic conditions will cause the company to fall short in
the second quarter.
In a conference call Tuesday, Chief Financial Officer Ron Brown lowered his
guidance for the second quarter to 58 cents a share, which is down 5 cents
from Thomson Financial/First Call's current consensus projection of 63 cents
a share.
While Brown expects business to improve in the third and fourth quarters, he
concedes "there is more downside risk than upside opportunity for the rest of
the year."
The White Plains, N.Y., company, which owns and operates hotels under the St.
Regis, Luxury Collection, Sheraton, Westin, Four Points and W brand names,
reported first-quarter earnings of 30 cents a share, up from operating
earnings of 26 cents a year ago.
The slumping economy has taken a toll on the lodging industry as demand for
hotel rooms fell off in the first quarter. The impact didn't bypass Starwood.
Indeed, the company's revenue per available room, or revpar, which is a
measure of occupancy and room rate growth, rose 4.3% at North American hotels
it has owned for at least a year, which is short of the 6% growth it had
previously projected for 2001.
While room rates rose 5.7% on average in the quarter, these gains were offset
by lower occupancy rates. Occupancy levels slipped 90 basis points to 67.1%
at its North American hotels in the quarter.
Chairman Barry Sternlicht said a number of factors affected occupancy. The
highly-publicized and much-feared Winter storm that was forecast to hit the
Northeast in March caused a significant disruption in travel and hotel
bookings, which affected bookings in the Big Apple and the Northeast
corridor. Although the storm never actually arrived, its anticipated arrival
created havoc, he said. "The loss of a week or two to bad weather had a huge
impact" on the company's occupancy, he said.
Starwood was able to offset the lower revpar growth in the quarter by wider
profit margins. Cost-cutting measures, a hiring freeze and the company's
energy agreement with Enron helped to lower costs and expand margins in the
quarter.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron, Napster take honors at MIT eBusiness awards

04/24/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

CAMBRIDGE, Mass. (AP) - Despite a string of court defeats in recent months,
Napster stole the show at the Massachusetts Institute of Technology's Sloan
eBusiness awards.
Napster founder Shawn Fanning was named ePerson of the Year, and the online
music trading service, which a judge has ruled violated copyright laws, also
won the "Disruptive Technology" award and the MIT Student Choice Award at a
ceremony Monday night.
Houston-based Enron was named eBusiness of the Year for a system that lets
customers buy and sell over the Internet. The system has grossed more than
$336 billion in transactions since its inception, accounting for more than 60
percent of trading volume.
Fanning, who grew up in Brockton and Cape Cod, called his online service
Napster after his own childhood nickname.
Vindigo, whose product turns handheld devices into personal navigators, was
Rookie of the Year. Web services firm CitySoft received the Social
Responsibility Award.
The winners were selected by a jury from more than 600 nominations.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.

INDIA: UPDATE 1-Termination on Enron's Dabhol meeting agenda.
By Y.P.Rajesh

04/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW DELHI, April 24 (Reuters) - A crucial board meeting to be held in London
by energy giant Enron Corp's Indian unit will consider terminating a $2.9
billion project in the western Indian state of Maharashtra, a senior official
said on Tuesday.
"Termination is one of the items on the agenda," Maharashtra's chief
secretary V.Ranganathan told Reuters referring to Wednesday's meeting.
"But our directors (on the board) will be there...they will explain to them
our position," the state's top bureaucrat said on the sidelines of a news
conference.
Enron is the largest single foreign investor in India through Dabhol but the
project has been embroiled in controversy since the mid-1990s over
allegations of corruption and high costs.
Analysts have said the winding up of the project would be a blow to India's
efforts to woo foreign investors after it opened its economy a decade ago.
Dabhol Power Co - 65 percent owned by Enron - is involved in a payments row
with Maharashtra and is facing a cash crunch following the default by the
Maharashtra State Electricity Board (MSEB) on payments worth 2.26 billion
rupees ($48.31 million).
The project's first phase of 740 MW is in operation while the second phase of
1,444 MW is expected to be commissioned later this year.
CHEAPER POWER
Earlier, Maharashtra Chief Minister Vilasrao Deshmukh told a news conference
that he had yet to hear the outcome of a meeting between DPC officials and
its lenders held in London on Monday.
Deshmukh and his officials were in New Delhi to meet the finance and power
ministers over the power project.
A DPC spokesman had said Monday's meeting was to update the lenders on the
payment situation while the Indian media had speculated the company would
seek lenders' permission to wind up the project ahead of its board meeting.
Deshmukh said Maharashtra would form a committee this week to renegotiate the
power purchase agreement (PPA) with DPC as recommended by an expert
committee.
"The main issue is the cost of power...there has to be a reasonable cut in
costs," Deshmukh said. "We don't need the amount of power (they are
generating) and at that cost."
Dabhol has come under fire because of the cost of its power. Critics object
to it charging 7.1 rupees per kilowatt hour compared with the 1.5 rupees
charged by other suppliers.
Deshmukh said the federal government said it would look into a Maharashtra
suggestion that it take over power purchases from the plant and relieve the
state utility of the payment problem.
He said the renegotiations were likely to start soon as both the government
and Dabhol were in a "hurry" to resolve the row.
"But (before that) we will have to watch what stand Enron takes at its
lenders' and its board meeting."
On Wednesday, Finance Minister Yashwant Sinha said the government hoped Enron
would not "take any precipitative step. We're confident we'll be able to find
a constructive solution."
On reports Enron was not interested in continuing with the project, Sinha
said, "Let them say so in the negotiations. We will cross the bridge when we
come to it."

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.


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Your message has been successfully relayed to the following recipients, but the requested delivery status notifications may not be generated by the destination.

       ddellacona@hess.com

--------- Inline attachment follows ---------

From:  </O=ENRON/OU=NA/CN=RECIPIENTS/CN=MHEARD>
To: ddellacona@Hess.com
CC: Sayre, Frank </O=ENRON/OU=NA/CN=RECIPIENTS/CN=FSAYRE>
Date: Wednesday, November 14, 2001 7:24:16 GMT
Subject:

Attached, for your review, are final execution copies of the Schedule to
the ISDA Master Agreement, together with Paragraph 13 to the ISDA Credit
Support Annex.  Please note that Part 5(j) of the Schedule was changed
pursuant to your discussion with Frank Sayre.

Marie Heard
Senior Legal Specialist
Enron North America Corp.
Phone:  (713) 853-3907
Fax:  (713) 646-3490
marie.heard@enron.com

				 <<enron-ahc schedule-execution
copy.11-14.doc>> 	 <<enron-ahc credit support annex-execution
copy1.11-14.doc>>


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From: "Menu, Cecile" <Cecile.Menu@BCHydro.bc.ca>
To: 1 <pfox@bracepatt.com>, 2 <hweg@pgwlaw.com>, 3
<dmbutz@butzdunn.com>,        4 <neil.bunker@ca.arthurandersen.com>,
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Subject: FW: Calif DWR Cut Off From Using State Funds To Buy Power
Date: Mon, 19 Mar 2001 07:47:04 -0800
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> ----------
> From:  Chu, Henry
> Sent:  2001 March 19 7:35 AM
> To:  Christopher O'Riley; David Wong; Joan Hutchinson; Powerex - ETA;
> Powerex - Middle Office; Powerex - Trading; Renata Kurschner; Sheena
> MacDonald; Teresa Conway
> Subject:  FW: Calif DWR Cut Off From Using State Funds To Buy Power
>
>
>
> ----------
> From:  Onukogu, Ernest[SMTP:Ernest.Onukogu@dowjones.com]
> Sent:  2001 March 19 7:07 AM
>
> Calif DWR Cut Off From Using State Funds To Buy Power   08:16 ET  Dow
> Jones
> Energy Service  (Copyright (c) 2001, Dow Jones & Company, Inc.)  (This
> article was originally published Friday)      LOS ANGELES (Dow Jones)--The
> California Department of Water Resources will no longer be allowed to dip
> into the state's General Fund to borrow money to buy electricity for the
> state, the chair of the state's budget committee said Friday.  The budget
> committee will deny further requests for state funds to buy electricity
> unless state regulators immediately carve out a revenue stream to allow
> the
> Department of Water Resources to recover the money, according to a letter
> state Sen. Steve Peace sent to state Department of Finance Director Tim
> Gage.  In a copy of the letter, obtained by Dow Jones Newswires, Peace,
> D-El
> Cajon, said that he is "concerned about the prospect of continuing to
> approve deficiency requests for electricity purchases...in the absence of
> any discernible progress by the California Public Utilities Commission to
> provide for the recovery of these funds."  Gage was not available for
> comment late Friday.  A PUC Administrative Law Judge was expected to
> release
> guidelines Friday on the size of rate revenues that the DWR must collect
> from the state's three investor-owned utilities.  The guidelines were not
> released as of late Friday, and a spokeswoman for PUC President Loretta
> Lynch said she did not know the reason behind the delay.  PUC Commissioner
> Richard Bilas said the commission is expected to discuss at its March 27
> meeting exactly how much money the DWR will receive from PG&E Corp. (PCG)
> unit Pacific Gas & Electric, Edison International (EIX) unit Southern
> California Edison and Sempra Energy (SRE) unit San Diego Gas & Electric.
> Last Friday, the DWR secured another $500 million from the state's General
> Fund to buy power. The state has authorized $3.7 billion to purchase
> wholesale electricity and has already burned through more than $3 billion,
> spending upwards of $50 million a day on electricity in the volatile spot
> market.  AB1X, the legislation that authorized the DWR to purchase the
> state's bulk power needs on behalf of the cash-strapped utilities, was
> signed into law two months ago.  A provision in the bill also authorized
> the
> state to issue $10 billion in revenue bonds to finance the long-term power
> supply contracts the DWR has entered into with generators. But first, the
> PUC must carve out a a revenue stream for the DWR before the bonds can be
> issued.  State Treasurer Phil Angelides said that the $10 billion will
> finance wholesale power purchases through September if the average price
> for
> power paid since January, when the DWR first began buying electricity in
> the
> spot market, is $250 a megawatt-hour.  However, California has paid well
> above $300/MWh average in January and about $228/MWh at the end of
> February,
> Gov. Gray Davis said recently.  The PUC approved a measure last week that
> allows the DWR to recover all of the money it spends on power, even if it
> means raising electricity rates.  Peace, one of the lawmakers who helped
> push through the state's deregulation law, said in the letter that he will
> meet with the Joint Legislative Budget Committee on a daily basis "for the
> purpose of denying any such future deficiency requests unless immediate
> actions are taken to resolve this situation."  -By Jason Leopold, Dow
> Jones
> Newswires; 323-658-3874; jason.leopold@dowjones.com      (END) Dow Jones
> Newswires 19-03-01  1316GMT
>
>
>


Jim/Don,

Do you know anything about this for Ecogas?

Michelle Cash

----- Forwarded by Michelle Cash/HOU/ECT on 06/09/2000 09:13 AM -----

	Randal Maffett
	06/08/2000 06:44 PM

		 To: Michelle Cash/HOU/ECT@ECT, Dan Lyons/HOU/ECT@ECT, rstephens@bracepatt.com
		 cc:
		 Subject: RE: D&O Insurance

FYI - see Jerrel's response to my query below.  This is the first I've ever
seen or heard that this was a "condition to closing."
Dan/Rob - is this true?

To me the cost is irrelevant since Jerrel is the only Director affected and
because of his actions (and/or lack thereof) the company can't afford to
cover him.
---------------------- Forwarded by Randal Maffett/HOU/ECT on 06/08/2000
06:38 PM ---------------------------

Jerrel Branson <jerrel@ecogas.com> on 06/08/2000 05:16:24 PM
To: "'Randal.Maffett@enron.com '" <Randal.Maffett@enron.com>
cc:
Subject: RE: D&O Insurance

Answering backwards - D&O insurance is exceedingly expensive for small firms
to secure, thus most do without it.  Second, it was a condition when we
closed and McConville/Lambert, et al researched it through Enron Risk
Management, Don Marshall, and stated that it was in place automatically for
any majority owned merchant investment.  A confirmation letter was promised
on 14 July and when pressed in September Lambert finally got around to
issuing the letter to Carl and me that I mentioned earlier.

Jerrel
-----Original Message-----
From: Randal.Maffett@enron.com
To: jerrel@ecogas.com
Sent: 6/8/00 4:42 PM
Subject: Re: D&O Insurance

I'm not very experienced in these matters so I'm checking with the folks
here.  Can you explain why Enron should cover non-Enron directors?  Why
doesn't Ecogas have its own insurance?  Any help you can provide is
appreciated.


Dan -

Per our earlier conversation, attached is a worksheet for a Master Physical
with South Jersey Resources Group LLC.  I do not know the name of the contact
at South Jersey to whom this should be sent.  Do you have that info???

As you will see, this Master will require an increase and extension of the
current guaranty.  The guarantor, South Jersey Industries, must increase the
guaranty amount to $7MM, and I would like to see them issue a guaranty with
no expiration date.

Please call me if you have any questions.  Thanks,

Jay


Dear Mechelle,

Although I am still somewhat confused about goals and deliverables of the
model project that we discussed last week, I thought I would share some
information with you that may help you better scope this project.  As I
currently understand it, AA wants to ensure that all databases, spreadsheets
etc are inventoried.

Currently, risk management is incharge of setting up curves and books in the
source systems. We are responsible for setting up the relevant curve/book in
RisktRAC.  We have no access to the source systems. We are changing this
process by:

Instead of being inserted in the middle of the process we are working with IT
to transfer over the responsibility of establishing curves and books in the
source systems to ourselves.  At the moment we are concentrating on ERMS,
then will work with EnPower, and lastly, exotic spreadsheets.
We are developing a process to validate all new curves the day they are
created.
Our global exception reporting captures books & deals that do not make it
into any of the VAR, credit, or DPR.
An inventory of active books in the RAC website (which all risk management
personnel have access to) is being created.  This is a short term fix until
the counterparty book library initiative can meet our needs (not before
March).
We are putting a tool together to track all of the book requests.

I'll keep you updated on our progress.

Best regards

Shona


Joe Stepenovitch dropped: Biakabutuka, Tim CAR RB
and acquired: Chapman, Doug MIN RB

Natural Gas Gridiron Address:
http://fflnet.myfantasyleague.com/fflnet2001/home/0205

Questions about this site?  Check out our FAQ (Frequently Asked Questions)
at http://www.myfantasyleague.com/fflnet2001/support_faq.html
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Following are the CEOs Ken is scheduled to meet with on Thursday to discuss
our comprehensive solution:

SAN JOSE
Scott McNealy - Chairman & CEO, Sun Microsystems
Piper Cole - Vice President Global Public Policy, Sun Microsystems
Mavis Toscano - Manager State & Local Government Affairs, Sun Microsystems
Tony Ridder - Chairman, President & CEO, Knight-Ridder, Inc.
Steve Kirsch - Founder & CEO, Propel Technologies
Ken Oshman - Chairman, President & CEO, Echelon Corporation (also on Sun,s
Board)
Fred Anderson - CFO, Apple Computer
Dan Scheinman - Senior Vice President of Corporate Affairs (and general
counsel), Cisco
Michelle Mallory Peacock - State Government Affairs Manager, Cisco
Casey Beyer - Vice President Government Relations, Exodus Communications

LOS ANGELES
Mayor Richard Riordan
Eric Moses - Assistant Deputy Mayor
Kevin Sharer - Chairman & CEO, Amgen Inc.
Sarah Jensen - Vice President of Engineering and Operations, Amgen Inc.
Ray Irani - Chairman & CEO, Occidental Petroleum Corp.
Robert Day - Chairman, CEO & Managing Director, The TCW Group
Bill Simon - Founder, William E. Simon & Sons
Selim Zilkha - former CEO, Zilkha Energy
Tom Patterson - Partner, Sidley & Austin
Robert Sinnott - Senior Managing Director and Chief Investment Officer, Kayne
Anderson Investment Management, LLC
Arnold Schwarzenegger - President, Oak Productions
Richard Ferry - Chairman, Korn/Ferry International
Bruce Karatz - Chairman, President & CEO, Kaufman & Broad
Ken Lombard - President, Magic Johnson Theaters & Johnson Development


NOTE:  The e-mail transmitting the Twenty-third Revised List of Potential
Marketing Affiliates
 should be revised to change the name "Acadian Management LLC" to "Acadian
 Exploration LLC".  (The list attached to that e-mail reflects the correct
name.)


FYI.

This is the list of the Petronas executives visiting Enron on Feb 8.
I have invited them to lunch. Would you like to join me for lunch.

I would like to propose a short courtesy meeting at 10  with Jeff/John (5 -
10 minutes),
followed by RAC/Research presentation till 11:30.

Vince

P.S. I shall reserve a conference room for this meeting

---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 01/08/2001
10:02 AM ---------------------------

azminab@petronas.com.my on 01/07/2001 06:37:33 PM
To: Vince.J.Kaminski@enron.com, Shirley.crenshaw@enron.com,
KhairuddinBMJaafar@petronas.com.my
cc:
Subject: Re: Meeting on Feb 8, 2001

Dear Kaminski

4 members from Corporate Risk Management Unit

1. Iqbal Abdullah   - General Manager
2. Nur Azmin Abu Bakar   - Head, Risk Assessment & Controls
3. Zulkifli A Rahim - Head, Risk Measurement & Systems
4. Adnan Adams - Head, Special Projects

Regards

Vince.J.Kaminski@enron.com on 03/01/2001 09:45:02 PM

To:   azminab@petronas.com.my
cc:   Vince.J.Kaminski@enron.com, Shirley.Crenshaw@enron.com
Subject:  Re: Meeting on Feb 8, 2001

Dear Mr. Nur Azmin Abu Bakar,

Thanks for your prompt reply.

Please, let us know how many members of your team will
visit Enron.

I look forward to our meeting on February 8.

Vince Kaminski

azminab@petronas.com.my on 01/02/2001 06:38:33 PM

To:   Vince.J.Kaminski@enron.com, KhairuddinBMJaafar@petronas.com.my,
      Shirley.crenshaw@enron.com
cc:
Subject:  Re: Meeting on Feb 8, 2001

Dear Kaminski,

  Happy New year and thank you for the reply.  We are honored to have
lunch with you and your team however we have another appointment at
2.30p.m.

Regards

Vince.J.Kaminski@enron.com on 03/01/2001 07:38:19 AM

To:   azminab@petronas.com.my
cc:   Vince.J.Kaminski@enron.com, Shirley.Crenshaw@enron.com
Subject:  Meeting on Feb 8, 2001

Dear Sir,

I would like to apologize for the delay in responding to your fax.
I was on vacation for the last few days.

I shall be honored to meet your delegation on Thursday, February 8 at 10:00
a.m.
Please, let me know if you will be free for lunch after the meeting.

Vince Kaminski