Handle Enron cautiously: Deshmukh

By Our Special Correspondent

THIRUVANANTHAPURAM, MAY 2. The Maharashtra Chief Minister, Mr. Vilasrao Deshmukh, today advised the State to handle the Enron issue cautiously and refrain from committing the mistakes made by his State.

Addressing a press conference here today, Mr. Deshmukh said the Maharashtra Government was treading carefully on the Enron issue and it hoped to renegotiate the power tariff with the U.S. company.

Mr. Deshmukh's observations assume significance in the context of the running controversy regarding the Kannur Power Project, which had been denied permission by the LDF Government.

Mr. Deshmukh said that Enron had written to the Maharashtra State Electricity Board that it was ready to renegotiate the power tariff provided the Government of India made a formal request. He said the renegotiation would start as soon as the Union Government handed over the formal letter asking for a renegotiation.

Mr. Deshmukh pointed out that the basic issue in Enron's Dabhol project was related to the power tariff. The foreign exchange rate was fixed at Rs. 32 a dollar at the start of the project. But now, it had gone up to Rs. 47 a dollar, thereby pushing the cost of power up. He indicated that the renegotiations would focus on this aspect as well.

The Maharashtra Government had proposed renegotiation on the basis of the Godbole Commission recommendation. He was confident that the Enron would agree to renegotiate the tariff in the interests of the Maharashtra Government and its own interests.

In reply to a question, Mr. Deshmukh said the Enron project had been a major drain on his State's finances, but it had overcome all problems by handling them very carefully.

He said the Maharashtra Government would extend all support to the UDF if it were to come to power to process the various parameters relating to the Kannur project so that it did not commit the same kind of mistake as Maharashtra did. He, however, made it clear that his Government welcomed foreign direct investments but not at the cost of the State's interests.

Mr. Deshmukh attacked the Centre for not using the various options available under the WTO agreement to come out with a balanced import-export policy.

Asked for his comments on Mr. Sharad Pawar's statement that the NCP was considering joining the People's Front, Mr. Deshmukh made it very clear that his party's alliance with the NCP was confined to Maharashtra alone. `The alliance with the NCP is a post- election affair as part of the attempts to unite all secular forces. The Congress had fought the NCP and several other parties which are now part of the Congress-led Government. But the alliance had been formed in order to keep the BJP-Shiv Sena combine out,' he said.

Asked how his party could accept the NCP which had an alliance going with the BJP in Meghalaya, Mr. Deshmukh said the Congress- NCP ties were confined to Maharashtra. `If the NCP creates any problems in Maharashtra, the alliance would end,' he said.

Mr. Deshmukh attacked the CPI(M)-led LDF for its five- year misrule which had left the State virtually bankrupt. `The credibility of the LDF is so low that the people would not vote for it.' The CPI(M)-led Left parties would be defeated in Kerala and West Bengal, he added.

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Section  : Southern States
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