Message-ID: <23180699.1075851594695.JavaMail.evans@thyme> Date: Fri, 10 Aug 2001 06:19:18 -0700 (PDT) From: m..schmidt@enron.com Subject: Enron Mentions Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: Schmidt, Ann M. X-To: X-cc: X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Deleted Items X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst World Watch The Wall Street Journal, 08/10/01 DJ Enron: UK Teesside Plant May Be Offline For Several Weeks Dow Jones, 08/10/01 Electric storm: Mild summer and US slowdown stave off Californian crisis The Independent - London, 08/10/01 The power behind the Teeside plant where three died The Independent - London, 08/10/01 THIRD MAN DIES AFTER EXPLOSION Scottish Daily Record, 08/10/01 UK: TEXT-S&P says Teesside Power plant shutdown no economic impact. Reuters English News Service, 08/10/01 AUSTRALIA: Pacific Hydro seeks 75MW wind farm approval. Reuters English News Service, 08/10/01 Cepsa, Endesa, others to bid for 25 pct of Gas Natural's Algerian contract AFX News, 08/10/01 INDIAN POWER MINISTER BRIEFS PM ON POWER SCENARIO Asia Pulse, 08/10/01 INDIA'S DABHOL RECEIVES CUSTOMS DUTY NOTICE FOR LNG TERMINAL Asia Pulse, 08/10/01 Enron willing to sell Dahbol stake to India The Daily Deal, 08/10/01 India: Dabhol Power goes to PM with equity sale offer Business Line (The Hindu), 08/10/01 India's Prabhu on Enron's Offer to Sell India Project: Comment Bloomberg, 08/09/01 International World Watch Compiled by David I. Oyama 08/10/2001 The Wall Street Journal A6 (Copyright (c) 2001, Dow Jones & Company, Inc.) ASIA/PACIFIC Enron Seeks to Sell Dabhol Stake to India U.S. energy company Enron said it wants to sell its 65% stake in Dabhol Power to India's government for at least $1 billion. But India's junior power minister told deputies in Parliament, in a written reply to questions, that the government isn't considering any proposal to buy Enron's stake. Dabhol is caught in a bitter dispute with the Maharashtra State Electricity Board, its sole customer, over tariff levels and payment defaults. General Electric and Bechtel of the U.S. each hold 10% Dabhol stakes, while the MSEB owns a 15% stake. The $2.9 billion Dabhol plant is India's largest foreign direct investment. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. DJ Enron: UK Teesside Plant May Be Offline For Several Weeks 2001-08-10 08:23 (New York) LONDON (Dow Jones)--Enron Corp. (ENE) Friday said its 1,875-megawatt Teesside plant in northeast England may be offline for several weeks. Teesside, which suffered an explosion and fire Aug. 8 that killed three employees, must remain offline during a Health and Safety Executive investigation which "may take several weeks to complete," Enron said in a statement. "The plant remains offline and no decision on future operations will take place for several days," it added. Following an investigation, Enron will have to submit a safety case for approval before any portion of the plant may be brought back online, the Health and Safety Executive has said. The process may be complicated by the fact that there has been one previous fatal incident at Teesside. Business Electric storm: Mild summer and US slowdown stave off Californian crisis Andrew Gumbel in Los Angeles 08/10/2001 The Independent - London FOREIGN 19 (Copyright 2001 Independent Newspapers (UK) Limited) NOTHING ABOUT California's electricity crisis is turning out as expected. This was supposed to be the summer of sky-high wholesale prices and non- stop rolling blackouts, but they haven't happened. In fact, if you were to take a tour of the Golden State now you would be hard pressed to notice there was a crisis at all: The lights are on, and everyone is still here. That's mostly because of a fluke of nature: The weather has been uncannily mild and so demand for air-conditioning and refrigeration systems, in particular, has been significantly reduced. It also helps, in a perverse sort of way, that the economy has been slowing down, particularly the energy-guzzling hi-tech sector. Consumption fell by 11 per cent in June, even before a round of retail price increases kicked in on 1 July, and by 5 per cent in July. Contrary to dire predictions, wholesale prices have in fact been falling, That's not all that has gone against expectations. We heard California's governor, Gray Davis, and his supporters, accuse private energy generating suppliers of "gouging" prices; the worst of them, they said, were based in the president's home state of Texas. However, power-buying statistics published last month showed that Texas companies like Enron and Dynergy had, in fact, sold California only 10 per cent of its electricity since the beginning of the year - much less than the Canadians, say - and that the highest spot-rate prices of all had in fact been charged by California-based concerns. We were also told to expect a showdown between California and the federal government. Californians, went the common wisdom, were hapless victims of a failed deregulation that had left them at the mercy of ruthless generating companies; moreover, their appeals for help from the Federal Energy Regulatory Commission (FERC) were falling on deaf ears because the president and his advisors were all in the pocket of those self-same companies. This picture, too, has been complicated by recent events. Under heavy pressure, FERC has reluctantly agreed to impose reasonably effective price caps, not only on California but on all the western states. At the same time, California's public officials themselves have been shown to be in the pocket of energy companies. Two veterans of the Gore presidential campaign brought in by Governor Davis recently resigned because it turned out they were simultaneously working for Southern California Edison, one of the state's two giant power utilities. Five other advisors were dismissed because of their personal holdings in energy stocks, while a sixth quit of his own accord. A further eight are under investigation. The conflict of interest has reached Governor Davis' press spokesman, Steve Maviglio, who agreed last week to sell his $12,000 (pounds 8,450) stake in a California energy company, Calpine, that had been noticeably absent from his public criticisms of the "price- gougers". It has also reached the chairman of the California Energy Commission, Bill Keese, who has just agreed to sell more than $500,000 in energy holdings, some of them in companies that have come before him on regulatory matters. Given the confusion into which the politics of the crisis has descended, it is tempting to look at the lights burning, both on Hollywood Boulevard and the San Francisco hilltops, and conclude that there is nothing out of the ordinary. But the crisis is far from over. "It's not over because none of the underlying causes have been addressed," says Mark Bernstein, an energy specialist with the Rand Corporation. As things stand, California's largest utility, Pacific Gas & Electric (PG&E), is in bank-ruptcy court, and the second-largest, Southern California Edison, is still scrambling around for ways to avoid the same fate. The state government has become the sole official buyer of energy, creating severe imbalances in the budget and effectively putting all non-essential public programmes on hold. (Total energy expenditure in California is expected to reach $70bn this year, compared with $7bn last year, with the state picking up much of the slack.) There are hopes the state could eventually withdraw from the wholesale market, but nobody yet knows how. There is a complicated court battle going on to secure rebates from the generating companies for over-charging. The rebates could go as high as $9bn, although it is not clear whether the recipients would be the utilities or the state. The rebates will almost certainly get sucked into PG&E's bankruptcy settlement, further complicating the issue. Meanwhile, the root causes of the crisis have hardly changed: an improperly deregulated market with too few power sources, too little transmission infrastructure, and a dearth of active players in a position to create a truly free market. If nothing changes, Dr Bernstein says, the shortages, uncontrolled price rises and rolling blackouts will simply be postponed until next summer - or whenever the next demand crunch hits. Much of the political debate has focussed on generating plants - whether local authorities have been too slow to build them, or too reluctant on environmental grounds. But the state of the transmission grid is arguably a bigger problem, not only in California where there is a north-south bottleneck in the San Joaquin Valley, but across the country. Last month, Las Vegas suffered a blackout because there was no way to funnel emergency power supplies there quickly enough. Since there is no direct north-south transmission line through Nevada, the power has to travel either through California (a no-go in the current situation) or through Utah, which was experiencing similarly high demand at the time. One can anticipate similar problems in New York state and New England, where the dense population makes it hard to build new transmission lines, or in Florida, which has just two electric line connections to the wider United States, both of which were operating at capacity during last winter's peak season. Given the state's continuing population growth, it wouldn't take more than a bit of freak weather or a power plant going down unexpectedly for the great electricity crisis to hit there as well. "You can build as many power plants as you like, but if you don't have the grid to transmit the electricity they won't do you any good," Dr Bernstein remarked. The White House energy plan recently unveiled focuses almost entirely on energy production; not on distribution or conservation. If implemented in its current form by Congress, it is unlikely - energy specialists say - to do much to alleviate the core US problem. California's respite this Summer could well be the calm before a much wider storm. Caption: Los Angeles' CityWalk area during a blackout in May. Analysts are concerned the problems in US electricity supply are not restricted to California AP; Gray Davis: Criticised the electricity companies ; Rolling blackouts closed many shops and businesses in California, like the one above, earlier this year AP Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. News The power behind the Teeside plant where three died Chris Blackhurst 08/10/2001 The Independent - London FOREIGN 8 (Copyright 2001 Independent Newspapers (UK) Limited) UNTIL TUESDAY'S explosion that killed three people at its Teesside power station - the third died yesterday - the public profile in this country of the US energy company Enron was pretty low. The $100bn firm owns Wessex Water but lacks the consumer recognition of other high-profile energy operators such as Exxon, Shell and BP. But, behind the scenes in high political circles, Enron is extremely well known. It is a company that gives the appearance of securing what it wants - either here, such as when the Labour Government came to office vowing not to allow any more new private gas-fired power stations, only to relent in Enron's case on Teesside, or in the US, where the firm is the best connected of any to the new President, George Bush. Or even in India, where, despite enormous public hostility, it was the driving force behind plans for a massive power station that was built at Dabhol, near Bombay. In India, Amnesty International compiled a report on the tactics used by the local contractors building the power station to get their own way. It makes for graphic reading: Sugandha Vasudev Bhalekar was in her bathroom at five in the morning when several male police officers entered her house and started beating sleeping members of her family. Mrs Bhalekar, 24, and pregnant, was then dragged from the house into the road and struck on the back with police batons. She said: "My one-and-a-half-year-old daughter desperately held on to me but the police kicked her away." She was targeted by the police because her husband, Baba, was a leader of those who were protesting against the building of the plant. Villagers complained they would be overcharged for their electricity, while there were allegations of corruption involving state officials. Local people were also displaced and concerns were raised about environmental damage. Local constructors paid the state government for the hire of reserve police to protect the site but, in a damning study, Amnesty found the police engaged in a systematic campaign of mass arrests and unprovoked assaults. Amnesty called on the US companies building the plant to safeguard human rights and to establish guidelines for all security personnel at the site. Amnesty's report - the only one ever produced by the organisation into a commercial project, as opposed to a government - was published in July 1997. The main US company, with an 80 per cent share in the Dabhol plant, was Enron. Yet in Britain, little more than a year later at the 1998 Labour conference, Enron was able to pay pounds 15,000 to sponsor the party's gala dinner. In all, Enron has given pounds 27,500 to Labour's cause. When Labour came to power in 1997, there was little prospect, seemingly, of the company's hoped-for Teesside plant going ahead. The Tories had pursued a "dash for gas" policy; Labour, out of a residual support for Britain's coal industry, voiced its opposition. But, within two years, Enron received a special exemption to build at Teesside. By November last year, Labour was right behind the "dash for gas". Stephen Byers, the Trade Secretary at the time, lifted the ban completely, thereby consenting to another Enron project on the Isle of Grain in Kent. In the world of energy and political lobbying, Enron is king. Simon McRae, of Friends of the Earth, said: "When you look at their influence in Government- policy making, in areas like climate change, they know how to throw their weight around." Determined to succeed in Britain, the firm hired the political lobbying organisation, GJW. One of GJW's employees subsequently boasted to an undercover journalist how he would ensure Enron would overcome the Government ban on private gas-fired stations. "The way you go about it is that you play on the existing prejudices within the Cabinet for coal, you play on the existing prejudices within the Cabinet for competition, and you play the forces off against each other. It's intimate knowledge of what's going on that produces results in the end." The lobbyist did well and Enron got its power stations. The company continues to wield influence. This year, it was one of a select group of businesses to accompany Nick Raynsford, the government minister, on a trade mission to Egypt. Ralph Hodge, Enron's European head, has been awarded a CBE for "services to the power generation and gas industries." Relatively obscure here it may be, but Enron touches us all our lives. In the US, the company was the biggest backer of George Bush. Its chairman, Kenneth Lay, is widely supposed to be one of the new president's energy advisers. Mr Bush is under pressure to reveal the identities of his behind- the-scenes team and it would be a shock if Mr Lay is not one of them: his company even vetted applicants for jobs on the commission regulating the US energy market. The Enron chairman is thought to have also played a key role in the shock decision by Mr Bush to drop the Kyoto global warming accord and to persuade him to open up the hitherto protected Alaskan arctic wilderness to energy exploration. Caption: Jeffrey Skilling, left, the CEO and president of Enron, speaking yesterday outside the Teesside power plant where an explosion on Wednesday left three dead Richard Rayner Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. News THIRD MAN DIES AFTER EXPLOSION STEPHEN WHITE 08/10/2001 Scottish Daily Record Streets 36 (Copyright 2001) A THIRD man caught in a power station blast died yesterday as it was revealed the plant operator has twice been fined for safety breaches. A fourth victim of Wednesday's explosion at Teesside Power Station is in a stable condition in hospital with burns. US company Enron moved into the UK in 1989. But during construction of the pounds 850million plant in 1992, a worker died after being run down on the site. The company were fined pounds 17,000, said the Health and Safety Executive. The second prosecution in 1998 came after a worker was horrifically burned and left unable to work following an blast at the plant two years earlier. Enron were fined pounds 10,000. But a spokesman for the firm insisted yesterday: "Safety is paramount in all Enron operations and the company strives to prevent all incidents. "In 2001, the plant was given the Rospa Gold Award for safety. "Until yesterday, throughout the eight years of operation there had been only one serious incident, in 1996 when an employee was injured in an explosion. "The cause was traced to a fuel feed pipe joint which had not been tightened after maintenance by the contractor Westinghouse." Enron's chief executive officer, Jeff Skilling, travelled to Teesside from the firm's HQ in Houston, Texas. After seeing the accident site, Skilling said: "We pledge to work with the authorities to ensure it never happens again anywhere." The plant, which employs 100 people and generates electricity for the National Grid using North Sea gas, remains closed. A joint police and health and safety investigation has been launched into the explosion in an electrical transformer which led to an oil fire. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. UK: TEXT-S&P says Teesside Power plant shutdown no economic impact. 08/10/2001 Reuters English News Service (C) Reuters Limited 2001. (The following statement was released by the ratings agency. LONDON, Aug 10 - Following a fatal explosion at Teesside Power Ltd.'s 1,875 MW generating plant on Aug. 8, 2001, Standard & Poor's said today that it does not expect the resultant plant shutdown will have a material impact on the plant's economics, if it is able to restart quickly. It is too early to determine whether the shutdown will have a long-term economic effect on the noteholders at Teesside Power Financing Ltd. (TPFL). The servicing of TPFL's debt notes (BB/Stable) is dependent on adequate dividends paid by the operating company, Teesside Power Ltd., to TPFL. It is understood that Teesside's short-term power-supply obligations have already been hedged, protecting the plant from high balancing charges under the new electricity trading arrangements introduced in March 2001. The ultimate sponsor and operator of the plant, Enron Corp . (BBB+/Stable/A-2), has not yet determined the extent of the damage. Restarting the plant will be subject to the approval of the relevant safety authorities. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. AUSTRALIA: Pacific Hydro seeks 75MW wind farm approval. 08/10/2001 Reuters English News Service (C) Reuters Limited 2001. MELBOURNE, Aug 10 (Reuters) - Power generator Pacific Hydro Ltd said on Friday it had lodged planning applications for a 75 megawatt wind farm at Buangor in western Victoria, but the project hinged on development of local turbine manufacturing. The company last month opened the 18.3 MW Codrington wind farm on Victoria's west coast. Its proposed 150 MW to 200 MW Portland Wind Energy Project is awaiting environmental approval. Pacific Hydro said it had invited tenders from four wind turbine companies to begin Australian manufacturing if its Portland proposal cleared the approvals process. "Since we started building the Codrington wind farm the Australian dollar devalued about 15 percent so the economics of importing has changed," Pacific Hydro managing director Jeff Harding told Reuters. "Our Portland project presents a project of sufficient size to justify local manufacturing." Companies short-listed to set up Australian wind turbine manufacturing are Enron Corp , Vestas Wind Systems , NEG Micon and Bonus. Harding said it was hoped the Portland project would clear government regulatory approvals by early next year. "We hope to have construction start on the Portland wind farm project by the middle of next year," he said. Clearance of the Portland project would pave the way for the company to move ahead with the Challicum Hills Wind Farm project at Buangor. Harding said the company had lodged a town planning application with the Ararat Council and it was hoped the project could begin in 2003. A number of companies are looking at building wind farms, particularly in Australia's southern states, partly due to Federal government legislation requiring retailers to increase their use of renewable electricity. Pacific Hydro shares ended down nine cents at A$3.99 on Friday while the broader market was down 0.45 percent. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Cepsa, Endesa, others to bid for 25 pct of Gas Natural's Algerian contract 08/10/2001 AFX News (c) 2001 by AFP-Extel News Ltd MADRID (AFX) - Compania Espanola de Petroleos SA, Endesa SA are among a group of companies which will today present bids for 25 pct of Gas Natural SDG SA's supply contract with Algeria, El Pais reported, citing the Economy Ministry. The ministry has not released details of the potential bidders, the newspaper said, but noted that the four leading Spanish electricity utilities and BP Amoco PLC are known to be participating in the auction. It said Enron Corp is also thought to be interested in the contract which is currently held by Gas Natural unit Enagas SA. Last July, the government announced plans to auction part of the contract to other companies operating in Spain's energy sector. The interested parties must present a business plan for the gas sector for the period 2000-2005, and will also have to provide the sector with an amount of natural gas similar to or greater than that awarded in the contract. Neither Gas Natural nor Repsol YPF SA, which owns 45 pct of the gas company, are permitted to participate in the auction. jg/jdy/jkm/ For more information and to contact AFX: www.afxnews.com and www.afxpress.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIAN POWER MINISTER BRIEFS PM ON POWER SCENARIO 08/10/2001 Asia Pulse (c) Copyright 2001 Asia Pulse PTE Ltd. NEW DELHI, Aug 10 Asia Pulse - The Indian Power Minister, Suresh Prabhu, has briefed the Prime Minister, Atal Bihari Vajpayee, on the power scenario in the country, including developments on the private sector projects. The ongoing payment dispute between US energy giant Enron-promoted Dabhol Power Company and its sole buyer the Maharashtra State Electricity Board (MSEB) and another US company AES threatening to pull out of Orissa power distribution are believed to have come up for discussion during the detailed presentation made by Prabhu yesterday evening. Both Enron and AES are wanting to walk out of the power sector over payment defaults by state utilities. Yesterday's meeting was attended by the Finance Minister, Yashwant Singh, the Planning Commission, an economic thinktank, Deputy Chairman, K C Pant, the junior Minister for Planning & Programme Implementation, Arun Shourie, the junior Minister for coal, Shahnawaz Hussain, and the junior Minister for Power, Jayawanti Mehta. The presentation outlined the major issues in power sector including declining trend of capacity addition and presisting shortages, poor financial health of state power utilities, transmission constraints and poor state of rural electrification, an official statement said here. Outlining the action proposed by Ministry of Power, Prabhu told Prime Minister that to arrest the declining trend in capacity addition, central utilities are targetting an addition of 43 per cent of required MW capacity as against 23 per cent in the 9th Plan. (PTI) 10-08 1653 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA'S DABHOL RECEIVES CUSTOMS DUTY NOTICE FOR LNG TERMINAL 08/10/2001 Asia Pulse (c) Copyright 2001 Asia Pulse PTE Ltd. NEW DELHI, Aug 10 Asia Pulse - Customs authorities have issued a show-cause notice to Enron-promoted Dabhol Power Company on valuation and rate of duties for goods imported by the company for its LNG terminal. "Dabhol Power Company received communication on August 3, 2001 from Customs authorities which relates to on-going discussions between the parties on the issues of valuation of imported goods and the rate of duty applicable for aspects of the project," a DPC spokespersons told PTI from Mumbai. Customs Department is believed to have slapped about Rs three billion duty demand on DPC for its imports relating to the liquefid natural gas (LNG) terminal for the second phase of the $2.9 billion power project. Asked about the quantum of duty involved in the customs communication, the spokesperson said "we are evaluating it." He said "while it is quite routine for a project of this size to discuss these kind of issues with customs authorities, we are examining the queries raised therein, and shall be reverting with the due response." Enron is setting up a 5 million tonnes (expandable to 10 million tonnes) capacity LNG import and regassification terminal at Dabhol, of which only 2 million tonnes would be used as feed stock in the power plant while the remaining being marketed. Customs department is understood to have raised objection on the premise that since surplus gas would be supplied to other industrial users and therefore the facility is not project specific and so does ot entitle concessional duty, sources said. (PTI) 10-08 1646 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. M and A Enron willing to sell Dahbol stake to India by Claire Poole 08/10/2001 The Daily Deal Copyright (c) 2001 The Deal LLC The Houston energy giant is finally willing to sell its 65% stake in the troubled power company to the Indian government in exchange for the money it invested in the project. After weeks of rumors, innuendo and scattershot comments by executives, Houston energy giant Enron Corp. finally made it official Aug.9: The company is willing to sell its 65% stake in the troubled Dabhol Power Co. to the Indian government in exchange for the money it had invested in the project. "In the interest of quickly resolving this dispute, Enron has expressed a willingness to forgo expected profits and negotiate terms that would allow the Indian authorities to acquire the foreign stakeholders' interests in DPC," Enron said in a written statement. Enron insisted, however, that it and co investors General Electric Co. and Bechtel, which each own 10%, recoup all that they had invested in the $2.9 billion project. "Enron and its partners would still need to recover 100% of their costs," the statement continued. "The company is willing to take this step and forgo significant profits on its investment if the dispute can be resolved amicably with full recovery of our costs in the near term." Press reports have pegged Enron's investment at $1 billion. Enron spokesman Johan Zaayman wouldn't disclose how much Enron and its partners had invested in the $2.9 billion project. "We are seeking to sell the equity we've invested in the project, but we're not talking about any specific amounts yet," he said. "It's too early." John Olson, an analyst at Sanders Morris Harris in Houston, figures Enron has invested about $875 million in equity in the facility. "I call them 'innocents abroad,'" he said. "They didn't know boo about what they were getting into. In India, you can't win, you can't get even and you can't even get out of the game." Enron and Dabhol's primary customer, the Maharashtra State Electricity Board, which owns 15% of the project, have been locked in a bitter dispute since April over investment, payment and pricing issues. Enron has charged MSEB with failing to invest in the project's second phase and defaulting on $45 million in electricity payments. MSEB countered that Dabhol's electricity prices were too high. It stopped buying power from the facility in May. Enron's sale of its stake in the project would be a big blow to India. It is India's biggest foreign investment to date, and Enron's departure could scare away other companies from investing in the country. Arlington, Va., power plant developer AES Corp. is also threatening to leave the country. Last month, it said it would sell its 51% stake in electric distribution company Cesco unless the state government allowed it to raise tariffs and gave it a better regulatory environment. On Thursday, AES told state transmission company Gridco to stop supplying power because it has no money to pay it or even salaries for its 8,500 workers. www.TheDeal.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. India: Dabhol Power goes to PM with equity sale offer 08/10/2001 Business Line (The Hindu) Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd NEW DELHI, Aug. 9. AFTER failing to elicit the support of both the Power and Finance Ministries for a buyout of its troubled project by Central utilities, the Dabhol Power Company (DPC) has approached the Prime Minister, Mr A.B. Vajpayee, with a similar proposal, according to top sources. In a letter to the Prime Minister, DPC has offered to sell its equity in the project to the Government for $1 billion on a no-profit no-loss basis. Interestingly, when contacted, DPC chief, Mr Wade Cline, told Business Line that 'a private letter' to this effect had been recently sent to "the Power and Finance Ministry representatives." Mr Kline clarified that so far no company has approached them for buying out their stake in DPC. The Union Power Minister, Mr Suresh Prabhu, however, maintained that the Power Ministry had not received any such communication. The Power and Finance Ministries have been of the view that their role in resolving the issue would be restricted to finding buyers for phase II of the power project which has a capacity of 1,415 MW. Even as DPC has knocked at the doors of the PMO, the lenders to the project are at present talking to the stakeholders - MSEB, DPC and the Centre- for reducing the tariff so as to find buyers for the power from the second phase. Informally, the Centre has been consulted on the possible revenue losses if the duty on the LNG terminal is waived. This is likely to be of the order of around Rs 300 crore. The other variable is the transmission charges for transfer of power to the neighbouring purchasing states. As per the counter-guarantee agreement between the Centre, State and the DPC, which alone binds the Centre contractually, the Centre's liability is restricted to payment of outstanding energy bills of DPC (for past power sale to Maharashtra State Electricity Board) and payment of foreign debt up to $300 million. The sequence of events leading up to the DPC communique to the Prime Minister are worth recalling. Sometime in March this year, the company had informally sent a proposal to the Government to sell its equity in the project for $1 billion. The report published in this paper was, however, denied. On June 9 this year, when Enron worldwide chief, Mr Kenneth Lay, met with the Power Minister, Mr Suresh Prabhu, his proposal to the Centre to buyout the project was again shot down. Further, the Enron chief's request to meet with the Prime Minister did not fructify. Now, nearly two months later, the company has sent a proposal directly to the Prime Minister, seeking his intervention for the Centre to buyout the project for $1 billion. In Parliament, meanwhile, the Union Minister of State for Power, Ms Jayawantiben Mehta, stated that the Government does not propose to buy out the DPC's equity-holding in the project. Balaji C. Mouli Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. India's Prabhu on Enron's Offer to Sell India Project: Comment 2001-08-09 22:13 (New York) Mumbai, Aug. 10 (Bloomberg) -- Indian Power Minister Suresh Prabhu speaks on Enron Corp.'s offer to the government to buy out its $3 billion power project in the country at cost. Enron owns 65 percent of Dabhol Power Co, which runs the $3 billion power plant, India's biggest foreign investment. General Electric Capital and the closely held Bechtel group together own 20 percent of the company. ``There's no point in making an offer to the government. Was it (the offer) a part of the contract?'' between Dabhol and the state board. ``A seller has to find a buyer.'' Still, the government will help resolve the seven-month old payment dispute, Prabhu said. ``We will facilitate an early solution to the problem, and to the mutual satisfaction of the parties concerned. We are not washing our hands off it. ``We have taken number of steps towards reduction of tariff. I can't give you an absolute number right now as it depends on variables like fuel costs, capacity utilization. Even lenders have agreed to lower rates. We are working on the number.'' Enron wants to exit the venture, as it is owed $64 million by the Maharashtra State Electricity Board, its only customer, in unpaid bills. The board in May stopped buying power, saying it's too expensive. Enron said it has invested $875 million in the project. The plant can generate 740 megawatts of power and Dabhol had planned to add another 2,184 megawatts of capacity this year.