New book criticises Dabhol power project

Vol 3, PW 25 (19 Jan 00) Midstream & Downstream

new book is making waves in energy circles in India.

It is called Power Play, and it is described by one analyst as, the most damning, incisive and in-depth critique ever published of the controversial Enron-backed Dabhol power project in Maharashtra. Power Play (publisher: Orient Longman, Delhi) is by Bombay-based analyst Abhay Mehta, one of the original anti-Dabhol litigants.

Mehta alleges that every law of the land was subverted to push the project through. He alleges that pressure was brought to bear on the Central Electricity Authority (CEA) by bureaucrats and politicians to give Dabhol Techno-Economic Clearance (TEC) in violation of government of India norms on issues such as internal rate of return, tariff, and capital costs.

Among those named is former Maharashtra chief minister Sharad Pawar, whose party is now back in power and who is demanding review of the Phase II tariff. Enron's arrogance and total contempt for the law and legalities would have, at the very least, seriously jeopardised business prospects in any other country save India, alleges Power Play.

Mehta backs his claims with copies of confidential official correspondence and tables. One secret note, recording the views of the finance department of the government of Maharashtra, notes that: "One cannot but feel that the commitment on behalf of the Maharashtra State Electricity Board (MSEB) is open ended.

One cannot help feeling that Enron is not taking any risk whatsoever as a generator of power, but wants guaranteed rewards. This is not a very satisfactory agreement.

Other issues raised relate to the use of (expensive) LNG to generate fuel, and the cost of the project. Mehta alleges that all these questions were brushed aside by Enron's powerful supporters in the establishment.