The Central Electricity Authority (CEA) is the statutory body set up to study the details of the capital cost of any power project, and ensure that it is reasonable. Since the price of power depends on the capital cost, CEA clearance is the only safeguard provided to the public against over inflated costs.This authority was bypassed by Enron in connivance with the Central Govt. The mandatory techno-economic clearance for the Enron project was never given.
Enron consistently refused to provide the CEA with a break up of its capital costs. In a typical response to the CEA's queries Enron replied ``[The CEA's] request for more detailed costs of equipment/systems/works ... cannot be supported and is not deemed necessary.'' Lacking the necessary data, the CEA finally examined only the technical aspects of the plant and not it's economics. (see the minutes of the CEA meeting, of Nov '93).
In a letter, later touted by many as a clearance for the DPC project, the CEA did not issue (staturory obligatory) economic clearance for the project. It merely noted that the ministry of Finance (which is not a competent body to evaluate the costs of a power plant) had looked into the cost of power and found it to be reasonable. Thus the touted CEA clearance was only for the technical aspects of the project.
This was an abdication of the CEA's mandatory
duties and presumably makes the contract illegal by violating the Electricity
Supply Act.