Govt. concern over Dabhol Phase II

By Our Special Correspondent

MUMBAI, DEC. 7. Even as Maharashtra Government - after discussing the issue at an emergency Cabinet sitting at Nagpur on Tuesday night - continues to grope for a solution to its power utility's difficulties with the enormous bills raised by Enron's subsidiary, Dabhol Power Company, and wondering what to do with the project's 1,444 mw Phase II, which will soon become operational, it is quite likely that the focus in future would be to seek renegotiation of some terms.

In view of the hullabaloo triggered by the Government itself by conceding to ``review'' the project either completely, or just Phase II, pressure is being built up so that it becomes relatively easy for a re-working of the commercial terms of the contract. This, some sources, however, caution, ``could well be a long shot.''

For the first time, the fears of the Government and the anti- Enron lobbyists now more or less coincide. Both stress the ruinous economic implications of paying to Dabhol bills which are close to the entire realisation of the Maharashtra State Electricity Board. There is, however, one difference. The Maharashtra Government is aware of the huge compensation that would have to be paid to the independent power utility if it reneges on the contract.

Such assumptions, according to the Enron Virodhi Andolan, are ``inspired'' and ``false propaganda'' and it attributes them to ``certain lobbies''.On Wednesday, Mr. Pradyumna Kaul, convenor of the Andolan, which is also fighting for this point of view to be accepted by the Maharashtra Electricity Regulation Commission (MERC), released an eight-page legal opinion by a Senior Counsel, Mr. S. G. Aney, that the State Government and the MSEB are ``best advised to cut its losses while it is still possible before the activation of Phase II.''

Currently, Phase I of the project is operational, with its 740 mw capacity and only half of that power is being bought. The 1,444 mw Phase II is just months away and that would lead to further bills, even if power is not bought from it by the MSEB because capacity charges have to be paid whether power is bought or not. Capacity charges at this moment for the unbought power from Phase I is close to a massive and crippling Rs. 95 crores per month and this would only shoot up with Phase II becoming active and coming on stream.

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