Invoking the counter-guarantee of the Central Govt. on 6^th February 2001 Enron owned Dhabol Power Corporation (DPC) has just ensured that the Maharashtra State Electricity Board (MSEB) pay it the pending amounts of the Rs. 148 crore bill of November 2000 (paid on 12^th Feb. 2001). Standing in line are a Rs. 152 bill for December 2000 and another Rs. 112 crore bill for January 2001. It is estimated that by the end of the 20-year agreement with Enron, Maharashtra would have paid Enron around Rs. 4 trillion.

The point is, who actually should pay Enron’s bills?

From 1995-95 a storm of protests rocked the country, demanding that the Power Purchase Agreement (PPA) with the MNC Enron owned DPC should not be signed. The protests focussed mainly on two points. One, that clauses of the Agreement itself ensured very high costs of power and also continually rising costs of power (for reasons enumerated below). Two, that the Agreement involved a compulsory takeoff of 90% of power generated and also a minimum 16% profit. For this, the State Govt. had to guarantee payment from the state treasury if the MSEB (Maharashtra State Electricity Board) defaulted in payment. Not only this. Were the State Govt. to default on the payment, the Central Govt. counter-guaranteed to make good the payment from the Central exchequer.

First the Congress led State govt. of Sharad Pawar along with the then Union Power Minister Salve of the same party, brokered the Enron deal. Shiv Sena-BJP rode to power in the state on the slogan of throwing the Agreement into the Arabian Sea. In August 1995, Maharashtra CM (of this combine) gave a press statement saying the deal would be scrapped. On 3^rd November 1995, it was reported that Enron’s Chief Executive met Bal Thackarey. On 8^th January 1996, Maharashtra Govt. of Shiv-Sena-BJP gave the green signal for both phases of the Dhabol project. Enron ‘educated’ not only the Congress led State govt. of Pawar (and also his party), the subsequent Shiv Sena-BJP State govt., but also the 13 day long Central govt. of BJP under the Prime Ministership of Vajpayee in 1996, spending over 65 crore rupees in the process- and including this Bill in the project costs. The Vajpayee led Cabinet met in the lunch hour of Parliament, with its fall imminent within hours- and gave approval to the counter-guarantee scheme! Protests – voiced by the communist revolutionaries, the official ‘left’ parties, many patriotic individuals and organizations – were brushed aside as ‘alarmist’, ‘hysterical’, ‘anti-progress’ and slandered most for coming from just these quarters. Brushing aside apprehensions of power costing at least Rs. 4 a unit, Enron ‘indignantly’ announced that its power would cost Rs. 2.65 per unit. Later, Shiv Sena-BJP led State Govt. ‘renegotiated’ the Enron deal and triumphantly announced a further ‘reduction’ in prices.

Now come the hard facts. Generation of electricity under the first phase began in June 1999. In May 2000, the cost of power per unit was Rs. 4.90; by September 2000 it was Rs. 6.00; in October it was Rs. 7.00 per unit. According to the Power Minister of Maharashtra the bills for November 2000 were at the rate of Rs. 7.80 per unit. MSEB is actually able to take off about 40% of the power produced- the loss it is incurring is to the tune of Rs. 700 crore per year. It is estimated that it pays Enron 15% of its revenue earnings for around 5% of its needs. Electricity generated by MSEB itself costs Rs. 2/- per unit; it is able to purchase power form NTPC, from Bombay Suburban Electric Supply (BSES) and Tata Electric at about 80 paise per unit to Rs. 3/- per unit. The first phase of Dhabol generates 749 MW; even if it were not to draw even one unit of this power, MSEB would still pay Enron Rs. 92 crore per month. In totality, today this power we are buying from Enron is estimated to be the most costly power in the world.

The question is: WHY should the people of Maharashtra, or of any other state, foot Enron’s bills? Already there are statements that in order to keep paying these bills Maharashtra can build no more roads, there can no major road repairs, no municipal schools, no hospitals. In January 2001, Maharashtra Govt. has frozen the DA and bonus payments for state govt. employees – it will now have a permanent excuse to attack all facilities and hard won rights of working class and also general people. At the time of payment of the November 2000 bill, when MSEB threw up its hands and passed the ball on to the State Govt., Enron first pulled strings in the USA. There it had financed a considerable part of the four day long swearing-in celebrations of President Bush. The second act of Enron was to invoke the counter-guarantee. The former ensured that US Ambassador Celeste gave appropriate direction to the kowtowing Indian Govt. This ensured that the second phase of Dhabol project (which is further going to compound problems) was cleared, though MSEB’s shares had to be brought down form 30% to 10% to meet the financial crunch. Enron’s stake has risen. The second step of counter-guarantee of course ensured that MSEB paid up- some from “internal accruals but mostly from the state govt.”

With this situation, where there is no hope of these Govts. or any of these ruling class parties putting their foot down against this endless milking of our resources, why should not they themselves pay for their “education”? Why should not those Ministers who gave false assurances, who received ‘education’ at a cost of Rs. 65 crore, now pay these bills from their pockets? They are all around – the same Atal Bihari Vajpayee is Prime Minister, the ex-Ministers of BJP-Shiv Sena State Govt. and the Congress Govt. Why should the money not be recovered from them if they are not going to get this agreement annulled?

Some commentators are correctly pointing out that Enron as a project is most thoroughly exposed and is also thoroughly exposing all those involved. Enron is still taking an aggressive posture and selling a series a lies which can be proved for what they are worth with the facts at hand. All talk of “bringing in foreign capital” to develop infrastructure, to improve our balance of payment- which have all been thoroughly exposed for the falsehoods they are by those opposing MNCization and rising imperialist penetration of our economy- has fallen flat on its face. The total  cost of Enron’s Dhabol Power Project (both phases) is not more than Rs. 10,000 crores. The maximum inflow of foreign exchange is around Rs. 6000 crore (60%); the worst apologist can only say cent per cent. But even costs remaining constant (and they can’t- see below) the foreign exchange outflow is conservatively estimated at Rs. 100,000 cores. Where is the benefit?

A petition was filed against the DPC Agreement before the Maharashtra High Court at the time when the Agreement was signed. It was rejected. An appeal against the dismissal was filed in the Supreme Court. The appeal is ‘pending’ which actually has amounted to totally sidelining the question, if not virtual dismissal. What worse comment can there be regarding the role of Courts in facilitating the entry of MNCs against the interests of the country and the people?

When the Power Purchase Agreement was signed, the laws in force in India demanded a mandatory economic and technical clearance from the Statutory concerned body (i.e. the Central Electrical Authority, CEA). CEA gave the technical clearance but pointedly and explicitly refused to give economic clearance. It said the proposal must be examined by the Finance Ministry. The Finance Minister stated that the financial proposition was satisfactory. Why should he not be called to account for putting wrong information before the people? Why shouldn’t he too be among those who pay the Enron Bill?

The cost of power from Enron will continue to be high, despite all claims to the contrary from Enron and its apologists. The first and also most horrible reason is that the cost is pegged at dollar terms- i.e. Enron sells power in India, which is generated in Indian but we pay for it in dollars, not rupees! Since the value of the rupee is on the downslide against the dollar – and all attempts at WTO compliance will ensure further fall – the cost of power will continually rise. Secondly, the fuel used is naphtha; thus the price is pegged also to the changing prices of petroleum products (as naphtha is a hydrocarbon product). It is of importance to note the not so widely known fact that Enron’s interest in power generation stems from its interests in selling oil and LNG – it is one of the largest energy traders in the world. The third fact is that there is a guarantee to offtake 90% of power produced- if MSEB can’t, and it can’t because who is going to consume such costly power and secondly the demand is not so high as to make the use inevitable- which means that MSEB is continually going to pay for an amount for which it gets zero remuneration. When the second phase gets underway form next year, there will be 2,192 MW of power and it is projected that MSEB will pay 52% of its current revenue for less than 20% of its installed capacity ( a loss of Rs. 300 crore per year). Inevitably this will result in MSEB slowly being handed over to Enron i.e. to pay for power from a power station generating 2000 odd MWs will hand over one with a generating capacity of 10,000 MWs. That’s just how MNCs work. Not only this. With the second phase coming on, Enron will shift from naphtha fuel to LNG, which also has to be bought at minimum offtake rates- or so says Enron which anyway sells LNG around the world.

Before DPC entered the picture, MSEB was considered to be a profit making undertaking. But Enron of course has not stopped arguing, and it blames MSEB for the current financial crisis. In a well exposed lie, Enron tries to make a case that if all the power MSEB is forced to offtake is consumed, the cost of power per unit will fall. Yes, it will fall, but not lower than or even matching power available from other sources. Enron also has the temerity to state that Maharashtra should divert its Rs. 1500 crore agricultural subsidy to subsidize Enron’s power! It thirdly says it has negotiated a deal to buy naphtha from the Indian Oil Corporation (IOC) at 170 dollars per ton, while earlier most of its import consignments from international supplier Glincore were bought at 310 dollars per ton. Its own statement is that foreign exchange rates remaining constant (italics added) the cost per unit power now would be below Rs. 4/- per unit. The catch is explicit.

The state govt. of Maharashtra is now on a suggestion-offering spree. On the one hand it has set up a Committee to review the problem and to give its recommendations within a month. On the other, it has suggested that the Enron power supply should be taken up by the whole country and the whole country should be made to foot the Enron bill. The second suggestion is that Enron should be integrated into NTPC. NTPC is supplying power at the rate of around Rs. 1.30 per unit and earns an annual profit of Rs. 3000 crore while generating ten thousand MW of electricity. If DPC is integrated into NTPC the latter will pay Enron an estimated bill of eight thousand crore rupees a year. WHY are all these facts not being used to denounce the Agreement for what it is and to demand that it be scrapped?

Enron and its apologists- the comprador big business and their subservient ruling class parties- are once again  on a spree of using falsehoods and flawed logic to placate the rising opinion against Enron. Many of those who have expressed opposition to the deal fairly consistently, also seem caught in the niceties of ‘honouring’ international agreements and trying to unearth clauses and arguments which would deal with courts of law. The plain fact is that the whole agreement is designed to loot and plunder, is anti-people and anti-national and has been possible only because our rulers are fully willing to bleed the country for their own commissions. What is against our sovereignty just cannot stand. Central Ministers are again- knowingly- fooling the country further by allowing the second phase of the Project in January 2001 at the clear-cut dictates of Bush Admn. It is imperative to build opinion and movement against this blatant kowtowing to imperialist dictates, to demand accountability from those who are responsible for foisting these ‘bills’ of Enron on the country and justifying them too, misusing positions of power and responsibility and to demand that the agreement reached with Enron backed DPC be scrapped in toto.