Maharashtra government softens attacks on Enron

Vol 3, PW 22 (24 Nov 99) Midstream & Downstream
     

Maharashtra chief minister Vilasrao Deshmukh, whose Congress party had promised to renegotiate Phase II (http://www.ei.

enron.com/presence/projects/india.html) of Enron's Dabhol power project, is now taking a much softer line. In his first definite statement on the project after the new government took charge last month, Deshmukh told reporters in Bombay on 17th November: There are no plans to cancel Phase II.

We have some doubts and reservations about the tariff being charged but we will discuss it with Enron. Deshmukh did not set a time frame for the discussions.

Observers see this as a significant climb down by a party, which, during the state election campaign accused Enron of selling costly power. The Congress party in Maharashtra had promised to put Phase II on hold, and also reduce the tariff of Phase I.

Enron is surprised by the government's comedown. The government is not saying anything on its own.

All these statements are in response to questions from reporters. We get the feeling the government does not want to remember all the statements it made during the campaign, Enron tells this report.

Enron maintains the government has not yet sought clarifications from the company on the tariff structure. We do not think they ever will.

We do not think they want to raise the issue to the level of Enron versus Government. We think they will sit down with the Maharashtra State Electricity Board (MSEB) and try to understand the tariff.

He added: We have not sought any clarifications from the state government on this issue, nor have we had a courtesy meeting with them, which is customary with all new governments. They are never there.

They are so busy politicking and staying in power they have no time for any real work. Maharashtra is ruled by an alliance of the Congress party and the breakaway Nationalist Congress Party.