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April 10, 2001
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Money > Business Headlines > Report April 10, 2001 |
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Set up enquiry commission to look into Enron PPA, says Godbole panelPriya Ganapati in Bombay The Godbole panel, set by the Maharashtra government to review the Enron project, has suggested that a commission of enquiry headed by a judge be set up to look into the irregularities (if any) in the power purchase agreement and the clearances granted to Enron in the Dabhol power project. According to highly placed sources, the report opines that a detailed examination on whether the PPA was negotiated fairly needs to be done and a commission of enquiry would be the best way to do it. The recommendation is part of the interim report that was submitted to Maharashtra Chief Minister Vilasrao Deshmukh earlier on Monday. The panel is headed by former Union home secretary Madhav Godbole. The other members of the committee are Deepak Parikh, chairman, HDFC, Rajendra K Pachauri, director, Tata Energy Research Institute, E A S Sarma, ex-secretary, energy/finance, GoI, Kirit S Parikh, emeritus professor, Indira Gandhi Institute of Development Research, and Vinay Mohan Lal, principal secretary, (energy), GoI. Sources said that three of the members -- Pachauri, Lal and Deepak Parikh -- have expressed their dissent over this recommendation in the report. The panel chairman Godbole and E A S Sharma are in favour of an enquiry commission being set up. According to reliable sources, the panel has concluded that the clearances granted to the project were not as per standard procedures and, hence, they need to be investigated into in detail. The Godbole panel was set up in February to review the Maharashtra State Electricity Board's PPA with the Dabhol Power Company. The panel was to also suggest appropriate measures to facilitate purchase of DPC's power by others including the Government of India and its agencies. The committee report suggests that government re-negotiate the terms of the PPA to bring down the tariff rate. A big chunk of the loans taken for the project is in foreign currency and the committee has suggested that these loans be re-negotiated so that the fluctuations in the forex market do not affect the project greatly. "The forex fluctuations are affecting the project greatly because a large chunk of the loans taken have the foreign currency component greater than the Indian one. So the committee wants that the Indian currency component in these loans be increased," a source said. There are also various short-term loans that have been secured for the project from institutions like IDBI. The report has suggested that these short-term loans be re-negotiated for repayment over a greater period of time. Sources said that this would give the government more time and reduce the fiscal pressure to a certain extent. Earlier, the Maharashtra government had taken a tough stance and asked the Centre not to pay up the dues to Enron when it invoked the counter-guarantee for the unpaid bills of December. While many had urged that the committee suggest the project be scrapped, the Godbole committee has not indicated that the government take any tough measures against Enron. The panel has only asked for re-negotiations on the PPA and loans. "There is a whopping Rs 80 billion at stake here. The project cannot be scrapped just like that. The government was only making some threatening noises about scrapping the project so that the babus do not do anything drastic knowing that the government is not in favor of it," the source said. The Godbole panel has recommended that the government re-negotiate the terms of the contract in order to increase the Indian shareholding in the project, sources said. The panel has suggested that bringing down the foreign shareholding percentage would also help to cushion the project against forex fluctuations. Expected to be tabled during the on-going budget session of the state legislature, Maharashtra Energy Minister Dr Padamsinh Patil said that the report received by the government is an interim one and another part will be submitted soon. The final report is expected to study the overall power scenario in Maharashtra. ALSO READ:
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