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Congress demands re-negotiation of Phase I of Enron project

Terming the Enron power project at Dabhol as a 'financial blunder' of the Shiv Sena-BJP government in Maharashtra, the Congress today demanded re-negotiation of the project's first phase and holding back the second phase until the new government is formed in the state.

Suresh Kalmadi, convenor of the Congress Campaign Committee, said that Enron's June bill of Rs 1.17 billion for 236 million units works out to Rs 4.95 per unit.

''This is besides the first bill given to the Maharashtra State Electricity Board for Rs 2.30 billion covering the pre- and post- commissioning charges upto May 31, 1999,'' he added.

The transmission and distribution losses of the MSEB are going to remain at 15.2 per cent, hence the cost of power from Enron when it reaches the final consumer will go upto Rs 6.30 per unit, he said.

The MSEB average tariff for the consumer is already low at Rs 2.14 as against its average cost of power, which it generates at Rs 2.37.

Assuming that the average tariff goes upto Rs 2.65 provided the MSEB is able to raise it at a similar rate, ''it will incur a loss of Rs 3.70 per unit which it will purchase from Enron. This invariably translates into loss of Rs 43 billion per year,'' he said.

The Maharashtra government has struck deals with Karnataka and Tamil Nadu to supply power to them at the rate of Rs 2.70 per unit during the day and at a subsidised Rs 2.30 per unit in the night. This is half the price at which the MSEB will be buying power from the Dabhol Power Company which is unviable for the MSEB, Kalmadi said.

He further added that Enron was awarded all benefits including tax holidays, incentives and exemption from income tax, sales tax, octroi and other statutory levies.''The Tata Electric Company was made to pay Rs 3.63 billion as a standby fee for the right to tap into the state grid in case of emergency, even if they don't draw a single mega-watt of power,'' he said.

''This clearly shows that all benefits were given to videshi (foreign) Enron at the cost of swadeshi (domestic) MSEB, TEC and NTPC,'' Kalmadi said.

The Tata Electric Company had been supplying power to the MSEB at a mere Rs 1.80 per unit and the public sector NTPC supplied it at an even cheaper rate of Rs 1.30 per unit.

But, within two days of Dabhol Power Corporation beginning its power generation on May 13, 1998, the MSEB stopped purchasing power from TEC as it had entered into a PPA with DPC wherein the MSEB is committed to pay for 90 per cent of the capacity whether it picks up the power or not.

He said the Shiv Sena-BJP government has been canvassing that it is neccessary to clear the Phase II as the demand for power is likely to increase. ''This is untrue since installed capacity is 12,338 MW whereas the peak demand is at 9400 MW,'' he added.

Kalmadi said that the Congress was demanding that the power purchase agreement with Enron be made public and an independent commission to go into the merits of the PPA, its impact on the finances of Maharashtra and the industrial units.

''The state government should re-negotiate all the transactions with DPC and an amicable replacement with Enron on the tariff structure of Phase I to protect the interests of the public. The Phase II should be kept on hold till all the above issues are resolved,'' he demanded.

Enron should be forced to deliver power at Rs 3 per unit as committed by Deputy Chief Minister Gopinath Munde after talks with Enron, he said, adding that the MSEB should be allowed to go for cheaper sources like TEC and NTPC. ''Enron should first make its Phase I tariff clear, taking into account the present exchange rate and then talk on terms of Phase II tariff. There will already be a surplus of 1800 MWof power by 2001 when the Phase II is likely to commence,'' he said.

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