Godbole Committee against scrapping Enron

By Mahesh Vijapurkar

MUMBAI, APRIL 10. The Madhav Godbole Committee, which reviewed the Enron-sponsored Dabhol Power Company project in Maharashtra, has not recommended its scrapping - either in its entirety or the 1,444 mw phase II - but has suggested many ways to bring down the costs to enable a cheaper tariff for supplies to the Maharashtra Electricity Board. The panel, set up by the Democratic Front Government, submitted the first part of its report exclusively on DPC today and took up hearings on how to improve the MSEB's fiscal status.

The Committee was unanimous in its review. Equally unanimous was the view that the project be re-negotiated to make DPC power affordable. However, it was divided on an enquiry by a sitting Supreme Court Judge into the decisions since Enron's appearance here in 1993. Three of the five members opposed a probe, apparently because most of those involved were no more on the scene and the question was not part of the Committee's mandate.

What seems to have driven the minority towards a recommendation for a wideranging probe under the Commissions of Inquiry Act was the manner in which a project, for which no competitive bids were called, secured concessions from both the State and the Centre.The State, the MSEB, the DPC and more importantly, the Centre would have to be brought into the picture and the role of various lending agencies, including domestic financial institutions, would have to be examined.

The idea, it would seem, is to beat down the per mw cost of the project, which at an outlay of $3 billion for a gross capacity of 2,450 mw - the net capacity is 2,184 for both phases, the first being 728 mw net - is lower than the U.S. $ 1.2 million. The other factor is to separate the 5 mn tpa re- gasification plant, with 2.1 mn tpa of that being committed to DPC from the project, to lower the outlay. For handling the rest of the capacity, DPC is to be paid.

Though the committee was asked, by a later amendment to its terms of reference, to re-negotiate the power purchase agreement, it is said to have given only broad guidelines and from accounts available to The Hindu, there was a disinclination to get involved in the issue.

With the Legislature in session and the Government assurance that it would be tabled, the report running into some 100 pages, would go first to the Cabinet, and given the diverse composition of a coalition, may even generate some heat since not all findings are likely to be acceptable to all.

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