World Business Briefing Asia: India: Power Dispute
The New York Times, 05/31/01

World Watch
The Wall Street Journal, 05/31/01

Spin Control: Spain Hits Turning Point At Windmill Parks --- Some Are Well 
Planned, Others Scar the Landscape --- EU Pride and Promises at Stake
The Wall Street Journal Europe, 05/31/01

Struggling Enron plant in India stops production 
Houston Chronicle, 05/31/01

BP Doesn't Expect Lead Role In Saudi Gas Proj - Source
Dow Jones Energy Service, 05/31/01

Regulators want state trade-off for caps / Davis asked to give up control of 
power lines
The San Francisco Chronicle, 05/31/01

Plan would have biggest customers pay Edison's debt
The San Francisco Chronicle, 05/31/01

INDIA'S MSEB DOUBTFUL OVER DABHOL'S 10 PCT TARIFF CUT PROPOSAL
Asia Pulse, 05/31/01

India: Interest rate dichotomy growing wider
Business Line (The Hindu), 05/31/01

India: Enron willing to continue project
Business Line (The Hindu), 05/31/01

INDIA'S DABHOL SHUTS POWER PLANT, TO ISSUE TERMINATION NOTICE
Asia Pulse, 05/31/01

That's right, double-click there, sir Techies, executives cross-pollinate as 
reverse mentoring gains ground
The Globe and Mail, 05/31/01

Enron Willing To Continue India Power Project - Report
Dow Jones International News, 05/31/01



Business/Financial Desk; Section W
World Business Briefing Asia: India: Power Dispute
By Saritha Rai (NYT)

05/31/2001
The New York Times
Page 1, Column 1
c. 2001 New York Times Company

The Dabhol Power Company, the Enron Corporation's unit in India, stopped 
generating electricity at its $3 billion power plant after its sole customer, 
the utility of the Indian state of Maharashtra, stopped buying power on 
Tuesday. The halt in power generation was the latest move in a months-long 
dispute that has cast doubt on the future of Dabhol's $2.9 billion power 
project in India, the largest foreign investment ever in India. Jimmy Mogul, 
a spokesman for Enron, which owns 65 percent of Dabhol, said the company 
remained open to discussions in the dispute, which involves overdue payments 
for power. Dabhol had issued a preliminary termination notice on May 19 
saying it was pulling out of the Indian project. Final termination requires a 
contractual six-month cooling-off period.

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


International
World Watch
Compiled by David I. Oyama

05/31/2001
The Wall Street Journal
A10
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BRIEFLY: 
-- Japan's NEC said it will cut back a plan to expand chip-production 
capacity at its Shanghai, China, joint venture because of the global chip 
industry's downturn. 
-- Taiwan's Finance Ministry said the island's domestic banks will be allowed 
to open representative offices in China. It said the banks will be allowed to 
conduct market research in China, but they won't be able to establish 
branches. 
-- In an effort to placate creditors of Asia Pulp & Paper, part of Sinar Mas 
Group, the Indonesian Bank Restructuring Agency said it has "no present 
intention to immediately foreclose or liquidate" Sinar Mas assets that it has 
taken as security. 
-- Dabhol Power, a unit of U.S. energy company Enron, said the Maharashtra 
State Electricity Board, its only customer, has stopped ordering electricity 
from Dabhol's $3 billion power plant. But Dabhol said that the plant remains 
operational according to its contractual obligations. 

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


Column One
Spin Control: Spain Hits Turning Point At Windmill Parks --- Some Are Well 
Planned, Others Scar the Landscape --- EU Pride and Promises at Stake
By Keith Johnson
Staff Reporter

05/31/2001
The Wall Street Journal Europe
1
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BARBATE, Spain -- The economy of this fishing community is as battered as its 
town hall, where dim lights flicker in the hallways and chips of paint flake 
off the walls. Up in his second-floor office, the mayor, Juan Manuel de 
Jesus, has an in-tray overflowing with troubles: a third of the town out of 
work; a desperately needed fishing treaty with Morocco; rising crime and drug 
abuse; and a big municipal budget deficit. 
But this morning, his thoughts revolve around a different irritant: windmills.
"Look at this," he says, unfolding on his desk a map of the countryside 
surrounding Barbate. Large yellow and green splotches -- a military training 
zone and a swarm of natural parks -- hem in the seaside town, leaving just a 
pair of white slivers. "Those are the only areas open for development," he 
says. His finger stabs one of the white areas near the Atlantic coast. "And 
that's where they're putting the windmills -- the one place we could have 
built a hotel, a resort, something that would bring us some jobs." 
The mayor sees the windmills as a blight on the land, driving away tourists 
and crimping more lucrative projects. Local environmentalists fret that the 
installation, with its rows of steel towers and sharp metal blades, will play 
havoc with migrating birds and mar the coastline as they did in nearby 
Tarifa, a windsurfing mecca on the Strait of Gibraltar. 
Tilting at windmills is nothing new in the land of Don Quixote. But wind 
power doesn't have to be like this. At the opposite end of the country, more 
than 1,000 kilometers to the north in the green hills of Navarra, 28 steel 
windmills perch on a ridge over a landscape that resembles a nature reserve. 
Cows nap in the shade of the towers, and the narrow gravel access roads 
follow original grazing trails. Electricity is transformed in a nearby 
substation built to resemble the neighboring stone houses. The approach -- 
the result of close cooperation between business and government -- has won 
accolades from environmentalists and business leaders alike. 
Spain, the world's No. 3 producer of wind power, has become a battleground 
for two competing models of developing the business: the hodgepodge of 
unsightly wind parks seen in the south and the carefully planned and 
unobtrusive installations found up north. The conflict is intensely local, 
with the country building enough new windmills to more than triple its 
wind-power capacity by 2005. But the model that prevails will have 
consequences far beyond the Iberian Peninsula. 
Anxious to clean up its environment and limit its dependence on imports of 
natural gas, the European Union has committed itself to generating 22% of its 
electricity from renewable energy sources by 2010. Yet less than 5% of the 
EU's electricity output now comes from windmills, thanks largely to poor 
execution and a brewing backlash. 
If Spain -- with its open spaces and relatively low population density -- 
can't sell the public on windmills, the EU will likely find it difficult to 
convince Europeans to accept more ambitious forms of alternative energy, such 
as biomass plants, which turn agricultural, animal and human waste into 
energy. The failure could also call into question the EU's commitment to the 
1997 Kyoto global-warming treaty, which U.S. President George W. Bush has 
been roundly criticized in Europe for rejecting. 
Few expected this turn in events back in 1996, when the EU first set a more 
modest 2010 target. At the time, wind power looked like the fresh breeze of 
the future. Soon, the union's most green-minded states, led by Germany and 
Denmark, were busily building wind parks to the applause of environmental 
groups, which saw wind power as a clean alternative to nuclear power and 
coal-burning power plants. 
But early enthusiasm led to shortsighted projects, leaving the European 
landscape littered with inefficient wind parks. Germany, for example, quickly 
became the world's largest producer of wind power, with 6,113 megawatts of 
capacity installed at the end of last year. But the breakneck growth has 
gobbled up most of the available sites for windmills, prompting government 
officials to promise more careful planning procedures. Opposition is also 
building in Denmark, forcing the government to rethink a wind-power subsidy 
program. 
All of this spells trouble for wind power, which relies heavily on government 
funding. "Lower-quality projects are mucking up the panorama," says James 
Stettler, a renewable energy analyst with Dresdner Kleinwort Wasserstein in 
London. 
Finding the right balance between wind development and environmental care 
would go a long way toward assuaging public opposition -- notably in 
wind-rich but windmill-poor Britain and Ireland -- and toward avoiding 
California-like blackouts in Spain in the years to come. The danger is real, 
says Rafael Miranda, chairman of Spanish utility Endesa SA, who this month 
urged the government to ease restrictions on new investments in power plants 
or risk outages. 
One way forward can be seen in the hills of northern Navarra, at the 
installations of Energia Hidroelectrica de Navarra SA, a Spanish company that 
specializes in renewable energy. On a recent afternoon, EHN official Enrique 
Huidobro races his four-by-four past two huge trucks on a dusty track leading 
up to Alaiz, an 85-turbine park built in 1999. EHN's head of civil works, Mr. 
Huidobro is working overtime -- patching the land, clearing debris and 
replanting grass around the park's latest additions, 10 big 660-kilowatt 
turbines whose 23-meter-long blades whoosh over the landscape with barely a 
whisper. 
EHN is Spain's largest wind-park developer. The company has installed more 
than 600 megawatts of wind capacity in Spain over the past five years, mostly 
in Navarra. Its parks have won accolades from environmental groups and 
business leaders alike, and company-sponsored surveys show public approval 
ratings above 80%. One of its subsidiaries, Energias Eolicas Europeas, this 
spring landed the biggest-ever financing package in the wind sector: some 900 
million euros from five European banks to build 31 wind parks in Don 
Quixote's La Mancha in south-central Spain. 
"The extra costs from taking care of the environment aren't questioned here," 
says EHN's chief executive, Esteban Morras, seated beneath oil paintings of 
modern windmills in his office in Pamplona. "That's the most profitable 
investment there is in the long run." 
Mr. Morras isn't just paying lip service to the green lobby. A former 
attorney and civil servant, he spent years working on water-resource and 
energy issues in the governments of his hometown and, later, the region. So 
when EHN was founded in 1989 and he became CEO, he was merely taking his 
passion to the private sector. 
Fresh from his morning English lesson -- EHN is expanding into the U.S., 
Eastern Europe and Latin America -- Mr. Morras outlines what he sees as the 
keys to making wind power palatable: careful planning, environmental 
sensitivity and the latest in technology. Then he grabs a pair of binoculars 
and peers out the window behind his desk. On the crest of a hill in the 
distance is EHN's newest prototype, a 1.3-megawatt turbine. It's 10 times 
bigger than the turbines first installed in southern Spain, yet its 
27-meter-long blades spin in much gentler breezes. 
"With more machines like that," Mr. Morras says, "we'll have parks that are 
less cluttered -- and more reliable and economical." 
The company's success owes a lot to the region's government. Navarra helped 
create EHN and still owns 48% of it. Navarra also approved generous tax 
credits for companies that invest in renewable-energy projects and 
established coherent and far-reaching planning procedures for wind power 
across the region. The strategy transformed the region from an also-ran in 
wind power to a model of development in five years 
Sitting in an office overlooking Navarra's first wind park, the regional 
official who guides the program reflects on the strategy. "It's not just 
about megawatts," says Nuria Iturriagagoitia, Navarra's director of industry, 
trade, labor and tourism. "You have to consider how it affects employment, 
education, agriculture, even tourism. The key was having a clear idea from 
the beginning on how to promote and implement alternative energies. EHN is 
the vehicle of our energy policy." 
She ticks off details of the 1995 energy plan. "The government studied 72 
sites across Navarra," she says, sketching a map of the shield-shaped region 
on a piece of paper. "It ruled out 43 of them: They were virgin territory, or 
too close to natural parks, even though they were some of the best, windiest 
sites," she explains, crossing out huge swaths of the hilly province. 
In the end, 16 sites made the cut. But Navarra's strategy for quelling 
opposition didn't end there. After EHN began its detailed planning, Mr. 
Morras held weekly public meetings with environmentalists, developers and 
local residents. "We discussed every curve of every road," he says. 
"Everybody was included." 
EHN, unlike many Spanish wind-park developers, also decided to have all its 
windmills assembled in local factories. Its new project in Castilla-La 
Mancha, for example, will be supplied by a newly built local Enron Corp. 
plant. 
The approach paid off. Today, all 16 sites have operational wind parks. Five 
years after the first turbines started spinning, some 35% of Navarra's 
electricity comes from wind power. That compares with about 2% for Spain as a 
whole, and 13% for Denmark, the world's fourth-largest wind-power producer. 
Having won over the citizens of Navarra, the regional government and EHN are 
now working to educate the whole country about wind power. They regularly bus 
students from across Spain to their wind parks, some of which have become 
tourist attractions. 
Compare this with the haphazard patchwork of windmills cropping up down south 
in Andalusia, home to one of the country's first wind parks -- the sprawling 
installation of low-power windmills planted in Tarifa in 1992. 
In 1997, wind-power developers presented some 65 projects to the regional 
government. But Andalusia had no overall plan for exploiting the region's 
wind-swept coasts and inland hilltops. The region had no plan to oversee 
wind-power development, and no uniform criteria for installing or removing 
windmills. In the end, about 20 wind parks were approved with little thought 
to how much total energy they would generate for the region or how they would 
cumulatively affect the environment. 
The result: Trucks and cranes have chewed up many pristine areas, leaving 
behind 45-meter-high towers and concrete-block substations. Yet wind power 
still generates less than 1% of Andalusia's electricity. 
Soledad Bonet, a spokeswoman for Andalusia's environmental department, 
acknowledges that the region has no global planning procedure for new energy 
installations, including wind parks. Although the region's departments of 
environment, labor and industry all review wind-park plans, individual 
municipal governments are essentially free to award development licenses as 
they see fit. 
The crosswinds of these forces can be seen on a hilltop west of Barbate, 
where Desarrollos Eolicos SA, the wind park unit of engineering firm Abengoa 
SA, is busy erecting a row of windmills. More than 20 towers are already in 
place, and neighbors worry the looming turbines and gouged-out access roads 
will create another Tarifa. "They might be `green' and all," says Antonio 
Aragon, a taxi driver who gets an eyeful every time he wheels out of town. 
"But they sure do foul up the landscape something awful." 
This is "third-world" development, says Jose Luis Tirado, a 47-year-old 
sculptor who heads of a local group of environmentalists, businessmen and 
landowners who oppose the wind park. "We've spent decades calling for 
alternative energy sources," he says. "But doing it like this -- without any 
sort of planning -- is worse than doing nothing at all." Equally galling, he 
says, is that none of the wind-park developers active in the region have 
shifted any production to local factories, despite Andalucia's jobless rate 
of more than 20%. 
Back in Barbate's town hall, Mayor de Jesus sits at his desk and recalls how 
he invoked building-permit irregularities to stop work on the wind park 
earlier this year. A few months later, though, a local judge overruled him, 
arguing that Abengoa stood to lose its investment and that Barbate would have 
had to reimburse the company for the cost of the whole project. Construction 
has begun again. Abengoa declines to comment. 
Now, Mr. de Jesus leafs through a dossier of proposed economic initiatives 
for his town, then sets it aside with a sigh. His legal battle to halt 
construction looks hopeless, as does his chance of winning a new accord that 
will allow local fishermen to cast their nets in Moroccan waters. 
Unemployment and drugs are slowly killing his town, he says. 
"Those turbines are being built -- there's nothing we can do about that," he 
says. "But that's it. We're passing a new urban plan this year. There won't 
be any more [wind-park] licenses in the future, not here."

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





May 31, 2001
Houston Chronicle
Struggling Enron plant in India stops production 
By LAURA GOLDBERG 
Copyright 2001 Houston Chronicle 
Enron Corp.'s India power plant has stopped production after its sole 
customer stopped ordering electricity. 
The Maharashtra State Electricity Board had not issued dispatch instructions 
for power from the Dabhol Power Co. since early Tuesday, Enron spokesman John 
Ambler said Wednesday. 
The move by the board is the latest in a series of actions and counteractions 
surrounding the $3 billion project, in which Enron has a 65 percent stake. 
Though the plant can't produce power unless it has dispatch instructions, the 
plant hasn't been shut down. Employees are there and the plant reportedly is 
operational -- ready to produce power. 
The board told Enron last week it was canceling a 7-year-old power purchase 
agreement. Enron says the board doesn't have the right to do so. 
Under the contract, the board is supposed to pay Enron whether it takes power 
or not, said Carol Coale, an energy analyst with Prudential Securities in 
Houston. 
But the board has already refused to pay for power, saying Enron isn't living 
up to its contract. Enron, which says it is meeting the contract's terms, is 
owed about $64 million for power sold in December and January. 
Days before the board gave notice to Enron, the company started proceedings 
to end the contract because of unpaid power bills. But six months must pass 
before Enron can end it. 
There is continued speculation that Enron is looking to sell its stake in the 
project. In a statement, Enron said Wednesday it is "still open to 
constructive discussions on solutions." 
Indian officials also have been talking to some of the country's states about 
purchasing electricity from Dabhol, Bloomberg News reported Wednesday. 
The project has faced ongoing problems, almost from the time of Enron's 
initial investment in it in the early 1990s. 




BP Doesn't Expect Lead Role In Saudi Gas Proj - Source

05/31/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

DUBAI -(Dow Jones)- BP Plc (BP) doesn't expect to be awarded the lead role in 
Saudi Arabia's South Ghawar gas project, a source at the company told Dow 
Jones Newswires Thursday, requesting anonymity. 
Two weeks ago, Saudi Arabia announced its selection of international oil 
companies to develop three gas projects together, estimated to require 
investment of $25 billion-$30 billion.
BP was selected, along with Exxon Mobil Corp. (XOM), Royal Dutch/Shell Group 
(RD), and Phillips Petroleum Co. (P), to develop the South Ghawar field, also 
known as Core Venture 1. Analysts estimate Core Venture 1 will need initial 
investment of between $15 billion and $17 billion. 
Industry sources have said that ExxonMobil and Shell are the strongest 
contenders to lead the project. 
The BP source said the leader of Core Venture 1 will get a 35% stake, 
Phillips a 15% stake, and the other two partners, 25% each. 
ExxonMobil has been appointed leader of Core Venture 2, or the Red Sea 
project, with a joint bid by Occidental Petroleum Corp. (OXY) and Enron Corp. 
(ENE) securing a minority stake. 
Core Venture 3, the Shaybah project, was awarded to a consortium of Shell, 
TotalFinaElf (TOT), and Conoco Inc. (COCA). 
Leaders for Core Ventures 1 and 3 have yet to be announced. 
Oil company executives are due to sign initial agreements Sunday. 
By Dyala Sabbagh, Dow Jones Newswires; 9714-331-4260; 
dyala.sabbagh@dowjones.com

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


NEWS
Regulators want state trade-off for caps / Davis asked to give up control of 
power lines
Bernadette Tansey
Chronicle Staff Writer

05/31/2001
The San Francisco Chronicle
FINAL
A.1
(Copyright 2001)

California's testy relationship with federal energy regulators could turn 
into a showdown tomorrow, when state power officials must decide whether to 
surrender some control over the state's electricity market or risk losing 
limited price curbs that kicked in this week. 
In agreeing last month to set flexible caps to restrict price gouging during 
electricity shortages, the Federal Energy Regulatory Commission said the 
state and its utilities must agree to let an independent organization manage 
California's power transmission lines.
Under that setup, California would be one of a group of Western states 
sharing a linked transmission grid whose rates and access rules would be set 
by independent managers. 
It is part of the commission's drive to create regional electricity markets 
throughout the country and make it easier to trade power across state lines. 
The regional grids would be a prelude to the nationwide free market in 
electricity advocated by the Bush administration and power marketers like 
Enron. 
But California Assembly Democrats who have challenged the federal demand say 
the requirement could interfere with some of the state's homegrown solutions 
to its energy crisis, such as Gov. Gray Davis' proposal that the state buy 
and run transmission lines owned by Southern California Edison Co. 
"A lot of folks were wondering how those two things would interact and are 
they mutually exclusive," said Paul Hefner, an aide to Assembly Speaker 
Robert Hertzberg, D-Sherman Oaks. 
Other officials say the federal requirement is premature because no regional 
organization yet exists that California can join. 
Mike Florio, a board member of the California Independent System Operator, 
which manages the state's power grid, said California is already part of 
regional efforts to clear transmission bottlenecks and share surplus power. 
But Florio said no Western state will rush into a regional arrangement and 
surrender part of its authority without ensuring a good deal for its own 
consumers. 
"We certainly don't want to be forced into an entity where generators or 
power marketers get to dictate the terms," Florio said. "This has got to be a 
long courtship rather than a shotgun wedding." 
When federal regulators initiated the move toward regional transmission grids 
during the Clinton administration in 1999, participation was voluntary, said 
Gary Cohen, general counsel to the state Public Utilities Commission. 
But in its April 26 order, the federal energy commission made its offer of 
limited price relief contingent on a filing by June 1 from the Independent 
System Operator committing the state to a regional management plan. 
The PUC and the Assembly are challenging that requirement. If anything, Cohen 
said, the state needs to increase control over its energy system while it 
recovers from its disastrous debut into deregulation, rather than submit to a 
regional authority that would be overseen by the federal government. 
"This doesn't seem to be the time to be doing more experimenting," Cohen 
said. "We certainly have not been able to rely on FERC to look out for the 
interests of Californians." 
WAITING FOR STATE'S RESPONSE 
Curt Hebert, chairman of the federal commission, declined to say yesterday 
whether the government would immediately yank the soft price caps that went 
into effect this week if it found the ISO response unsatisfactory. 
"He said he didn't want to prejudge the case," said commission spokeswoman 
Tamara Young-Allen. "He will wait to see what California files." 
PUC Commissioner Jeff Brown said he would be willing to give up some state 
control of the grid in exchange for meaningful price controls. But, he said, 
the federal measures granted fell far short of what California needed. 
"Hell, those caps are pretty toothless as they are," Brown said. 
The price controls are in effect only during power shortages. The cap is the 
price offered by the least-efficient generating plant. And generators can 
challenge any federal ruling that they have exceeded the caps, by claiming 
high costs. 
The controls were in place for the first time yesterday, when the state 
declared a Stage 2 power emergency, meaning reserves fell below 5 percent of 
available capacity. 
Florio said state power managers' answer to the federal government will 
probably be that they are already doing within California much of what a 
regional transmission organization would do. 
ISO COULD PLAY A ROLE 
The ISO manages the grid to ensure that power gets to where it is needed in 
the state, the organization told federal regulators in January. The agency 
could represent California when a Western regional organization develops, it 
said. 
The governor declined to say yesterday what stand he would take on federal 
regulators' demand. 
"I'm of a mind to do something, but I still have to talk to my lawyers," 
Davis said. 
Assembly Democrats say regulators in Washington have no right to withhold 
actions to correct California's dysfunctional power market. 
"They're required to . . . ensure that just and reasonable rates prevail in 
the market," Hefner said. "Why should we have to dicker to get them to do the 
job Congress created them to do?"

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


NEWS
Plan would have biggest customers pay Edison's debt
Greg Lucas
Sacramento Bureau Chief

05/31/2001
The San Francisco Chronicle
FINAL
A.5
(Copyright 2001)

Legislative leaders are drafting a new rescue plan for Southern California 
Edison that would put the utility back on its feet financially at the expense 
of its biggest customers. 
The plan would leave manufacturers, refineries and other big industrial 
customers with the burden of paying nearly all the utility's $3.5 billion 
back debt through a dedicated charge. Residential and small commercial users 
would be on the hook for only a fraction of the back debt.
Big users say it is unfair to saddle them with all of Edison's debt, but 
supporters of the plan say it's these users that wanted deregulation and 
should shoulder the costs it created. 
"We're trying to put something together in a way that solves all these 
problems, and if people are to be pigheaded about it, we won't solve any 
problems," said Assemblyman Fred Keeley, D-Boulder Creek (Santa Cruz County). 
Although the plan is an alternative to Gov. Gray Davis' proposed deal to put 
Edison back on its feet financially, it could be used as a model to help 
restore Pacific Gas and Electric Co. to solvency. 
Democrats say the plan contains some elements desired by Republicans, but GOP 
lawmakers object to saddling large business users with Edison's debt. 
The plan is based on the way gas customers are divided into "core" and 
"noncore" users. 
SEPARATING 'CORE' USERS 
Under this proposal, electrical users would be divided the same way. Core 
users would be customers who use 500 kilowatts or less a month. Noncore would 
be those using more than 500 kilowatts. 
Out of Edison's 4.2 million customers, only 3,600 would be noncore customers. 
But those 3,600 customers use about 26 percent of Edison's demand for energy. 
Core customers would get their power from generators owned by Edison, 
long-term contracts and alternative energy producers, such as wind farms and 
solar panels, on contract with the utility. 
That would mean those customers would no longer be subject to the whims of 
the spot market, which has far higher prices than other sources of 
electricity. 
Large users, the noncore customers, would be given the right to negotiate to 
buy their power directly from generators or build on- site power plants to 
make themselves energy self-sufficient. 
The plan would be phased in through January 2003 to give large energy 
customers time to prepare for buying power on the open market. 
During that period, residential, small business and large industrial users 
would all share in paying off Edison's debt. But in 2003, that burden would 
shift exclusively to the big users. 
Republican lawmakers and those same large users have been clamoring to be 
given what is called "direct access" to generators so they can negotiate 
cheaper rates. 
Enron is also backing the idea of cutting loose the largest electricity users 
because that would create a built-in market for the energy the company sells. 
Large users who want to remain on the grid could do so. 
EDISON 'ENCOURAGED' 
Sources said Edison officials met with lawmakers over the weekend to iron out 
details of the plan. 
A spokesman for Edison said he was "encouraged" by the talks. 
"I haven't seen a finished product or a plan," said Bob Foster, a senior vice 
president with Edison. "They're approaching this in a spirit of goodwill and 
trying to find a solution." 
Big businesses complain that the plan does not work because right now, there 
is nowhere they can buy cheap electricity. 
"We're very concerned that separating the core from the noncore means we will 
experience extreme rate hikes over the next two years," said D.J. Smith, a 
lobbyist for the California Large Energy Consumers Association. 
"When you add blackouts, the multiple interruptions of production and another 
potentially huge rate hike, the result would be catastrophic to the economy," 
Smith said. 
Added Dorothy Rothrock, a lobbyist for the California Manufacturers and 
Technology Association: "What's the rationale for the noncore to be paying 
the entire Edison undercollection? It sounds to me like just pure politics. 
They don't want voters to pay because they vote." 
CONSUMER ADVOCATE SMELLS A RAT 
Harvey Rosenfield, head of the Foundation for Taxpayer and Consumer Rights, 
said he thought the plan would eventually turn into a bailout as business 
interests muscle lawmakers into pushing some portion of Edison's debt onto 
residential and smaller commercial customers. 
"I think it's a trick. We've seen this same tactic used at the Public 
Utilities Commission, where what were supposed to be rate increases for big 
business end up costing more for residential and small businesses," 
Rosenfield said. 
The new plan also does not include the outright purchase of Edison's part of 
the transmission system that loops electricity around the state. 
Davis backs buying the lines for $2.7 billion. Democrats have insisted that 
for the state's financial help, taxpayers receive something of value. 
Republicans have insisted that they will back no proposal that includes state 
purchase of transmission lines. 
In the new proposal, the state would have a five-year option to buy the 
transmission lines for $1.2 billion -- the book value of the asset. 
In addition, the utility would make $1.5 billion available to the state to 
either purchase other assets -- such as Edison's hydroelectric facilities, 
for example -- or use it in partnership to build new power plants.

PHOTO; Caption: "If people are to be pigheaded about it, we won't solve any 
problems," said Assemblyman Fred Keeley. 
Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 



INDIA'S MSEB DOUBTFUL OVER DABHOL'S 10 PCT TARIFF CUT PROPOSAL

05/31/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

MUMBAI, May 31 Asia Pulse - The Maharashtra State Electricity Board (MSEB) 
has expressed serious doubts over Enron-promoted Dabhol Power Company's (DPC) 
proposal to reduce its tariff by 10 per cent from the current average to Rs 
3.15 per unit. 
"Agreed that they have mooted such a proposal verbally, we should not forget 
that it is ridden with assumptions, which are unacceptable to the board," the 
MSEB sources told PTI here today.
(PTI) 31-05 1745

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


India: Interest rate dichotomy growing wider

05/31/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MORE than 30 per cent of the targeted Government borrowings for the current 
year have been lifted from the market at pretty low yields. 
Over the last two months, the Reserve Bank of India seems to have managed 
short-term liquidity and interest rates to subserve the larger interest of 
making a success of the Centre's borrowing programme.
Over the last two years, the Government has been able to borrow cheap from 
the markets - a facility denied to other parts of the economy that have to 
borrow at stiff lending rates from the banks. 
Banks credit-rate borrowers and only the best get funds - this is perfectly 
logical. They also blindly put in funds into Government floats as they are 
totally risk-free, which again is perfectly sensible. 
Perhaps, in no part of the world is the practice of banking so risk-free as 
in Mera Bharat Mahan, with banks carrying NPAs of well over Rs 52,000 crore. 
The votaries of higher Government spending should not crib as the Centre's 
borrowing programmes have received a huge applause from the banking 
community. And the Centre promptly uses the funds on interest payments, 
defence and subsidies with capital investment getting to be negative. 
Allowing the private sector greater latitude has not curbed the scope of 
public sector capital investment. If it has not taken place, it is because 
even the Government is reluctant to set up power plants which have to offer 
free power to farmers. That is precisely why the private parties are 
insisting on escrow accounts. 
Over the planning period, public sector investment did not believe in 
cost-benefit principles as neck-high taxation levels and subsidies helped to 
hide the inefficiency. That is not possible today. In fact, higher savings of 
the Indian economy are being wasted more by the Government than by anybody 
else; also savings cannot be said to be acting as a restraint to the 
investment process. 
In the urban sector, there is an interest rate dichotomy with New Delhi 
getting easier funds than the corporate world. There is no premium on the 
interest rates for Government inefficiency. The same dichotomy prevails in 
the rural sector with bank funds flow tapering off and informal channels 
busy. Under Indian conditions, higher savings have nowhere to go, making the 
cut in contractual savings look sensible. 
It hurts not because interest rates are low but because there is no growth to 
absorb bank funds. 
At this point of time, one may not be able to find the tomes of any 
international economist to analyse the Indian economy. High savings, nil 
growth, steep Government borrowings and pervasive hunger and the rest cannot 
be reconciled into a neat econometric equation. 
Only growth can help. Sure we (our patriotic politicians and bureaucrats) 
allowed Enron to milk us. Today, if you are not a critic of Enron, you are 
bound to be dubbed a traitor. But can the Maharashtra State Electricity Board 
(MSEB) make money and get bank funds if has to provide power free to large 
sections of the public? Can it get some funds to revamp the existing plants? 
For us, there is progress in getting stuck at the Hindu growth rate of 3 per 
cent to getting stranded at the Orange growth rate of 6 per cent as breaking 
free is not in us. 
P. Devarajan

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


India: Enron willing to continue project

05/31/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, May 30. ENRON today updated Indian lenders about the status of the 
project and discussed ways for resolution of the current crisis. 
According to sources, Enron showed a willingness to continue with the project 
even after all the problems. Mr Wade Cline, Managing Director, is understood 
to have told the lenders that even though DPC had mentioned about taking a 10 
per cent cut on its returns, it would not do so unilaterally.
According to Mr Cline, the adjustments that Enron could make are contingent 
upon other parties too making an effort to make concessions. He made a 
presentation to the lenders about the current status of the project and the 
problems. 
Meanwhile, Dabhol Power Company today clarified that it has not "shut down" 
its plant. A spokesman said the plant continues to be "operational" as 
required by the power purchase agreement (PPA). He, however, confirmed that 
the Maharashtra State Electricity Board (MSEB) has not issued despatch 
instructions since 12 noon on May 29. 
He also said the company is "currently" not planning to terminate the PPA 
prior to the lapse of six months after the serving of the preliminary 
termination notice. 
Sources said that even though MSEB is not purchasing power from DPC, the 
company is not likely to default on its payments to lenders. This is because 
DPC has some money left from the disbursements of the first phase of the 
project. It can use the money to service its debt. It can, however, not 
transfer the amount to the second phase without the lenders' permission. 
The company also has a sizable amount of "completion equity" over and above 
the base equity to bring in if it chooses to continue construction. 
According to sources, the Indian lenders today wanted to know from Enron 
whether it is actually willing to stay back and complete the project or walk 
away. It appeared they are willing to stay, but only without conceding too 
much. 
Top MSEB officials said as far as MSEB is concerned, "DPC power may be 
available, but we would not take it. We are not recognising the PPA any 
more". They said the board had given the option to the company saying it 
would buy power and make payments according to the PPA but on an ad hoc 
basis. The adjustments could be made at a later date. 
"However, they threw it back to us saying you cannot have your cake and eat 
it too. So we decided to keep the cake," a State Government official said. 
Our Bureau

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


INDIA'S DABHOL SHUTS POWER PLANT, TO ISSUE TERMINATION NOTICE

05/31/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

MUMBAI, May 31 Asia Pulse - Amidst a rash of allegations and legal wrangles, 
the US energy major Enron-promoted Dabhol Power Company (DPC) has shut down 
the US$3 billion Guhagar plant and is set to issue the Termination Notice to 
its partner the Maharashtra State Electricty Board (MSEB). 
With the MSEB not drawing power since last noon, the multinational had no 
option but to shut down the plant as MSEB is their sole customer, a member of 
the Godbole committee, set up for re-negotiating the power purchase agreement 
with the DPC, told PTI here Wednesday.
"DPC is reeling under tremendous pressure from its lenders who have already 
given the multinational a go-ahead for a wrap up by terminating the 
contract," he added. 
He said the Enron India chief, K Wade Cline, had conveyed DPC lenders' nod 
for the termination to the Committee members yesterday and had said "we will 
have to terminate the contract, if no solution is found to this grave crisis. 
As it is, even now DPC cannot see a way out". 
The DPC had served a Preliminary Termination Notice to MSEB on May 19. 
"Even though there exists a cushion period of six months, the energy major 
will issue the notice," the official said. 
On the other hand, MSEB officials are not worried over the termination of the 
contract. "MSEB has already rescinded the PPA. So even if they terminate the 
contract, it hardly matters to us," they said. 
Meanwhile, the Godbole committee would meet the MSEB officials on June six, 
but DPC representatives have not been invited for the same. 
(PTI) 31-05 1029

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


Report on Business: Managing
Working Life
That's right, double-click there, sir Techies, executives cross-pollinate as 
reverse mentoring gains ground
DIANE LEWIS
The Boston Globe

05/31/2001
The Globe and Mail
Metro
B14
"All material Copyright (c) Bell Globemedia Publishing Inc. and its 
licensors. All rights reserved."

GE Plastics executive Jay Pomeroy knew familiarity with the Web was fast 
becoming an essential part of his job. So, to help him get up to speed, his 
company paired him with Gen-Xer Amelia Burkhart, a tech savvy thirtysomething 
at the Pittsfield firm who used her on-line experience to show the 
46-year-old senior manager the ropes. 
"I brought him knowledge of the Internet realm," said Ms. Burkhart, global 
manager of e-plastics.com, GE Plastics' on-line division. "He has to deal 
with people from other regions and countries. We actually conducted a virtual 
meeting so that he would understand how to participate in meetings on-line." 
She added: "Before mentoring, you would never see Jay's name on a same-time 
chat. Now he is on a lot and he's become a pretty avid Internet user."
Call it reverse mentoring -- a form of one-on-one coaching that gives younger 
techies a chance to teach senior executives how to surf the Net, use instant 
messaging, collaborate with a team in real time, find new business 
applications, or explore the ins and outs of buying products on-line. 
It's a relationship that's also a two-way street: one that allows corporate 
greenhorns to seek advice from seasoned executives to help hone the 
managerial skills and relationships they need to advance in the workplace. 
Specialists say reverse mentoring is one way established companies like 
General Electric are embracing the Internet in order to survive -- and thrive 
-- in a technology-driven world. The practice, which began in Europe, is now 
taking hold in the United States as young workers bring newfound energy and 
skills to Old Economy companies once labelled slow-moving monoliths. 
Joel Kurtzman, co-author of a new book titled Radical E: From GE to Enron -- 
Lessons on How to Rule the Web, says the interchange between mentoring pairs 
is a form of cross-pollination: Students gain new knowledge; mentors gain 
valuable institutional information from veterans whose political astuteness 
and management savvy helped them succeed. 
Ms. Burkhart, for example, says the program helped her develop a relationship 
with Mr. Pomeroy, who returned the favour by providing tips on managing her 
career at GE. He also shared some of his institutional knowledge, and he 
remains a close contact at the firm. "We now have a relationship that has 
blossomed," said Ms. Burkhart. "It's also been good exposure for me." 
Glenn Rifkin, co-author of Radical E, says the trend is one of the more 
positive results of the dot-com boom. "For the first time, entrenched 
business people and companies have had their eyes opened to the fact that 
there are now some really smart young people in their corporate settings who 
can teach them new things," he said. 
The authors, who spent months interviewing mature companies with well-known 
brands, are convinced the future will be shaped by Old Economy "hybrids" -- 
companies that combine the best practices from e-commerce and older 
brick-and-mortar firms. This, they say, is a more radical form of reverse 
mentoring in which Net companies with little business knowledge are paired 
with established firms, or young employees at mature companies find new ways 
to do business on-line. 
Some of those companies include General Motors, Procter & Gamble, GE, and 
Houston-based Enron, a global energy company. GE, the first Old Economy firm 
to endorse and use reverse mentoring in the United States, began a formal 
program two years ago after chief executive officer Jack Welch introduced the 
concept. The company has since paired dozens of workers in a push to bring 
key people into the computer age and expand the company's market to include 
cyberspace. 
Procter & Gamble began encouraging IT employees to participate in an informal 
reverse mentoring program last year. "Because technology changes so rapidly, 
individuals pair up with people who seem to be more adept at the latest 
application," said P&G spokeswoman Vicky Mayer. 
Meanwhile, in Philadelphia, the Wharton School has implemented a program that 
helps top executives from around the world bring New Economy practices into 
Old Economy firms. One feature of the e-fellows program: Mentoring sessions 
staffed by MBA students in their 20s who share their knowledge with seasoned 
corporate leaders. 
Wharton e-fellows learn how to use the Internet to reshape their firms. Over 
the course of three weeks, e-fellows spend time at the business school's 
Philadelphia campus, in Silicon Valley, and at an international site. The 
program began in September. 
Executives are paired with MBA students in a one-on-one match. "Typically, 
these students are Internet savvy and they live in a world where e-business 
and business are synonymous," said Neil Neveras, director of e-business at 
Wharton's e-fellows program. 
Mary Dolan, a 37-year-old manager at Random House, was among the first 
Wharton e-fellows to participate in the program last year. 
"My background was more publishing driven than e-commerce driven," said Ms. 
Dolan, now director of e-book sales for the New York publisher. "The program 
gave me a broader grasp and view of the world at large, beyond the niche area 
of publishing." 
Ms. Dolan was paired with 27-year-old David Turrettino, then a first-year MBA 
student. Mr. Turrettino taught Ms. Dolan how to collaborate with her peers 
using Wharton's Net tools. Since the program is team-based, Ms. Dolan learned 
to conduct meetings on the Net and experiment with on-line business models. 
"This is a partnership between the generations," said Mr. Kurtzman, a global 
partner at PricewaterhouseCoopers. "But at the height of the dot-com boom, 
people were saying strategy is dead. . . . Now there is an understanding that 
you must have the business savvy that comes with experience." 
Mr. Pomeroy, of GE Plastics, says having a Web presence has paid off. "At GE 
Plastics we took a presence on the Web, which was about $10-million [U.S.] in 
sales revenues in 1998, and expanded it to $1.5-billion in business by 2000," 
he said. "This year, we expect to do close to $4-billion in business 
on-line." 
Mr. Pomeroy said Ms. Burkhart helped him use the Net with greater ease. 
"Now, everything we do is predicated on the internal or external Web," said 
Mr. Pomeroy. "Everything is on that square screen that sits on our desks."

Illustration 

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


Enron Willing To Continue India Power Project - Report

05/31/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- U.S. based power major Enron Corp. (ENE) may be 
willing to continue with its India project the Dabhol Power Co., Wade Cline, 
managing director of Enron's indian unit, told the projects Indian lenders, 
the Business Line newspaper reports Thursday. 
Cline told lenders that Dabhol Power could make adjustments, including a 10% 
cut in power tariffs, but it wouldn't do so unilaterally, the news report 
added. Any adjustments would depend on similar concessions from purchasing 
parties.
The $3-billion Dabhol Power project, India's biggest foreign investment 
project, is situated in the western Indian state of Maharashtra. 
The project, which will generate 2,184 megawatts of power when the second 
phase is completed later this year, is at the center of a power supply 
dispute between the state government of Maharashtra and Dabhol Power over 
what the government claims are "unaffordable" power tariffs. The dispute has 
unnerved foreign lenders. 
Tuesday, the Maharashtra State Electricity Board stopped buying power from 
the two-year-old Dabhol plant. The move came five days after the MSEB told 
DPC that it was canceling the 1995 Power Purchasing Agreement between the two 
parties that sets electricity prices. 
MSEB officials said Wednesday that the Dabhol plant has stopped producing 
electricity. 
The news report however quoted a Dabhol Power official as saying that while 
the MSEB had stopped dispatch instructions, the plant continued to be 
operational. 
MSEB was Dabhol's only buyer. 

-By Muneeza Arjuman, Dow Jones Newswires; 91-11-461-9427; 
muneeza.arjuman@dowjones.com

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