Vince/Stinson,

Some news articles on India.  It appears that DPC will attend the May 11 
meeting, but will not be presenting any proposals.

They will be taking representatives from the Lender side, GE and Bechtel, as 
well as from the LNG Supplier side.

Also, a name has been thrown up as the likely person to represent the Center.

Regards,
Sandeep.


---------------------- Forwarded by Sandeep Kohli/ENRON_DEVELOPMENT on 
05/04/2001 02:36 PM ---------------------------


Nikita Varma
05/04/2001 07:47 AM
To: Nikita Varma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  (bcc: Sandeep Kohli/ENRON_DEVELOPMENT)

Subject: From The Enron India Newsdesk - May 4th Newsclips

THE ECONOMIC TIMES
Friday, May 04, 2001, http://www.economictimes.com/today/04infr01.htm
Godbole panel suggestions unacceptable: Enron, Girish Kuber 
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The above article also appeared in the following newspaper:

BUSINESS STANDARD
Friday, May 04, 2001, 
http://www.business-standard.com/today/corp13.asp?Menu=2
Godbole terms of reference not acceptable: DPC

THE HINDUSTAN TIMES
Power purchase talks between Govt, Enron falls through 
http://www.hindustantimes.com/nonfram/040501/detCIT14.asp
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THE TIMES OF INDIA
Friday, May 04, 2001, http://www.timesofindia.com/today/04busi2.htm
Enron ready to take part in PPA talk ,  Nitin Yeshwantrao

THE FINANCIAL EXPRESS
Friday, May 04, 2001, http://www.financialexpress.com/fe20010504/eco10.html
DPC team to appear before Godbole panel on May 11 

The above article also appeared the following newspapers:

MID DAY

http://www.chalomumbai.com/asp/article.asp?cat_id=29&art_id=10264&cat_code=2F5
74841545F535F4F4E5F4D554D4241492F5441415A415F4B4841424152&name=enron
Enron, state Govt to meet next week

THE HINDU BUSINESSLINE
Friday, May 04, 2001, http://www.hindubusinessline.com/stories/140456uy.htm
Enron wants renegotiation meet rescheduled 
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AFTERNOON
Friday, 4 May, 2001, http://www.afternoondc.com/ 
Houston team to meet Godbole
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BUSINESS STANDARD
Friday, May 04, 2001, 
http://www.business-standard.com/today/state1.asp?menu=32
Salve may represent Centre on Enron  talks panel 
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THE TIMES OF INDIA
Friday, May 04, 2001, http://www.timesofindia.com/today/04busi2.htm
Salve may represent Centre on Enron talk panel 
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PIONEER
Friday, May 04, 2001, 
http://www.dailypioneer.com/secon2.asp?cat=\cap2&d=flash
Enron talks: Salve may be Govt man 
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MID DAY
 Friday 4 May 2001, 
http://www.chalomumbai.com/asp/article.asp?cat_id=29&art_id=10281&cat_code=2F5
74841545F535F4F4E5F4D554D4241492F5441415A415F4B4841424152
Enron's rates too high: MSEB
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THE ECONOMIC TIMES, Friday, May 04, 2001 
Godbole panel suggestions unacceptable: Enron, Girish Kuber 

HOPES that the Godbole committee would be able to renegotiate the Dabhol 
power project promoted by the US energy major Enron may turn out to be 
misplaced. The US energy major says that the Godbole committee,s suggestions 
were unacceptable. In response to a query from ET, the company said in a 
statement that the  &published terms of the Godbole report do not represent 
an acceptable basis for further discussions.8  The statement said that it 
would be meeting the committee next week as &a matter of courtesy8. &Since 
the purpose of our meeting is to hear out the committee and understand their 
thoughts, we will not present any proposals,8 the statement said. According 
to highly-placed sources in the government, the company has informed the 
Madhav Godbole panel that it would be meeting on May 11. Earlier reports had 
indicated that the discussions with the panel would take place on May 5. 

According to sources, Enron would be meeting the panel with representatives 
of its lenders and shareholders. The Godbole committee, that studied the 
current power purchase agreement, has called for cancellation of the present 
tariff structure, renegotiation of the LNG and shipping contract, removal of 
dollar denomination as far as fixed charges of the tariff is concerned, debt 
restructuring and the formation of a committee to renegotiate the power 
purchase agreement. These suggestions, it seems, may not be acceptable to 
Enron. The Maharashtra government accepted the report and asked the Godbole 
committee to renegotiate. The committee has been given a month,s time to 
renegotiate on behalf of the state government with DPC for a new PPA.

The committee has opined that since the LNG facility of 5 mmpta is far in 
excess of what is required by the plant (only 2.1 mmpta of which 1.8 mmpta is 
on take or pay), it should be separated into a distinct facility whose 
capital costs should not be reflected in the fuel charge, not as take or pay. 
It should instead be only in proportion to the fuel regassified for the power 
generation. Using the entire allocated gas requires an unusually high PLF. 
Instead, the surplus gas can be sold to other players like Petronet or Enron,
s own Metgas. &It is important to distribute the cost over the entire 
capacity and not just the amount sold to the power plant,8 says the 
committee. Similarly, it has been suggested that Enron could lease out the 
harbour facilities as a common facility to other LNG importers. On the LNG 
contract negotiated by Enron for long-term supplies, it has said that since 
the LNG market has witnessed great changes, particularly as far as prices are 
concerned, the power company should take advantage of spot buys and 
renegotiate the contract accordingly.
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THE TIMES OF INDIA, Friday, May 04, 2001 
Enron ready to take part in PPA talk ,  Nitin Yeshwantrao

The Enron management has finally agreed to  participate in a 'discussion' 
with the Madhav Godbole-led re-negotiation committee set-up to facilitate 
the  restructuring of the Power Purchase Agreement (PPA) signed between the 
US power major and the state government.Officials of Dabhol Power Company 
(DPC), a subsidiary of Enron, alongwith their team of shareholders and  
lenders will arrive here on May 11 for talks with the  nine-member Godbole 
panel.Though the DPC spokesperson was reluctant to give a confirmation, a key 
Mantralaya official told The times of  India that the team had expressed 
willingness for talks with the experts committee in a bid to end the 
imbroglio.

Enron's response is viewed as a welcome development to amicably resolve the 
controversy which had been raging for the last few weeks, with the board of 
directors of Enron authorising its India MD K Wade Cline to serve a 
termination notice to MSEB. The state government, on its part, too adopted a 
confrontational position by slapping a Rs 401 crore rebate charge on DPC for 
defaulting on power supply.However, the sudden change of heart by the Enron 
management is largely attributed to the stand taken by its local lenders led 
by Industrial Development Bank of India (IDBI) which had recently opposed the 
move to pull out of the project. This was in contradiction to the stand taken 
by the foreign lenders of the DPC who were in favour of slamming the brakes 
on disbursement of funds to DPC. The Congress-led Democratic Front government 
had publicly declared that it would impress upon the Enron management to 
renegotiate the PPA as scrapping the project would not be in the interest of 
both the parties.

Last week, the state government constituted a nine-member panel of experts 
under former bureaucrat Madhav Godbole. Godbole had written to the DPC 
management inviting it for talks to re-negotiate the PPA on May 5. For the 
delayed response from Enron, the meeting has been rescheduled to May 11.The 
issues which would be debated at the meeting include the separation of the 
LNG facility from the power plant, renegotiating LNG supply and shipping 
agreements, redefining the DPC tariff and to convert it into a two-part 
tariff. The Godbole panel will bargain hard for removal of dollar 
denomination in the fixed charge component and to allow the Maharashtra 
government to sell power to third parties.
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THE FINANCIAL EXPRESS, Friday, May 04, 2001, 
DPC team to appear before Godbole panel on May 11 

A battery of Dabhol Power Company (DPC) officials and foreign lenders will 
appear before the Madhav Godbole renegotiations committee on May 11 &as a 
matter of courtesy,and not for presenting any proposals.8Simultaneously, the 
DPC has made it clear that the published terms of the Godbole report do not   
represent an acceptable basis for further discussions. The DPC team is likely 
to include officials   from the Enron Corp, Bechtel, General Electric, its 
Liquefied Natural Gas suppliers, Oman LNG and Abu Dhabi LNG and a Trustee 
Bank, ABN Amro for the proposed May 11 meeting, it is reliably learnt. 
Mantralaya sources said that the DPC had earlier expressed its inability to 
appear before the Godbole committee on May 5, fixed earlier, on account of 
the non-arrival of its team from Houston and other parts of the world. 
However, the company has ultimately decided to meet the Godbole committee on 
May 11.

DPC spokesman Jimmy Mogal said: &We confirm that DPC has been invited to meet 
the recently   formed negotiating committee. As a matter of courtesy, we have 
agreed to meet them next week.   Since the purpose of our meeting is to hear 
out the committee and understand their thoughts, we will not present any 
proposals.8  &While we have constantly maintained that we are open to a 
dialogue towards resolving issues, this meeting in no manner be construed as 
an open offer from DPC to renegotiate the terms of the contract. Furthermore, 
the published terms report do not represent an acceptable basis for further 
discussions,8 he added.Sources said Enron Corp chairman Kenneth Lay is likely 
to meet former chief minister Sharad   Pawar to find an acceptable solution 
for the ongoing crisis before the May 11 meet. Mr Lay told the foreign news 
agency on Wednesday that the Enron Corp has no immediate plans to sell its 
stake in the troubled $2.9-billion Dabhol power project in western India.
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AFTERNOON, May 4, 2001
Houston team to meet Godbole 

The Enron-promoted Dabhol Power Company (DPC) yesterday said it had agreed to 
meet the Godbole Committee "as a matter of courtesy" and this should "in no 
manner be construed as an open offer from DPC to renegotiate the terms of the 
contract." In a statement issued last night, the US energy major made it 
clear that the purpose of the meeting with the nine member renegotiating 
committee was "to hear out the panel and understand their thoughts, and not 
present any proposals." 
Furthermore, the published terms of the Godbole report did not represent any 
acceptable basis for towards resolving issues. 

Earlier, state government sources said that a team of senior officials from 
Enron headquarters in Houston is slated to attend the first Godbole 
renegotiations committee meeting, now to be held on May 11. The panel 
deferred its meeting from May 5 as in a formal communication, DPC requested 
the state government for a suitable  date other than the stipulated one, they 
said. However, the multinational is yet to send a list of its nominees, who 
are due to  arrive next week, they said. 

Meanwhile, the centre is likely to appoint Solicitor General Harish Salve as 
its representative on the high-power committee to renegotiate the Power 
Purchase Agreement (PPA) signed between DPC and Maharashtra State Electricity 
Board. Other members of the Godbole Committee are HDFC Chairman Deepak 
Parekh, Teri Director R.K. Pachauri, former union energy secretary E.A.S. 
Sarma, Kirit Parikh of Indira Gandhi Institute of Developmental Research, 
Maharashtra Energy Secretary V.M. Lal, state finance secretary S.K. Srivastav 
and MSEB Chairman Vinay Bansal. 
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BUSINESS STANDARD, Friday, May 04, 2001
Salve may represent Centre on Enron  talks panel 

Solicitor general Harish Salve is likely to be named the Centre,s 
representative on the high-power committee appointed by the Maharashtra 
government to renegotiate the power purchase agreement (PPA) with the US 
energy giant Enron-promoted Dabhol Power Company (DPC). According to highly 
placed government sources, Salve,s name has been cleared by both ministries 
of finance and power.

The Maharashtra government has appointed a negotiating committee headed by 
former bureaucrat Madhav Godbole to renegotiate the estranged PPA signed by 
the Maharashtra State Electricity Board (MSEB) and DPC. Enron had made 
opening of talks with Maharashtra conditional on the presence of a Centre,s 
representative on the negotiating committee. Salve would meet secretaries in 
the ministries of finance, power and law to firm up the Centre,s stand on the 
crisis arising out of payment defaults by MSEB, sources said adding that 
petroleum secretary is also likely to be included in the panel.

Sources said Enron appeared to be keen on solving the present impasse through 
negotiations judging from corporation chairman Kenneth Lay,s statement 
yesterday in Houston that the company had no plans to sell its stake in the 
$2.9 billion Dabhol project. The government is likely to make a formal 
announcement of Salve,s appointment on the negotiating committee by the 
weekend, sources said. The negotiating committee would suggest solutions to 
bring down the exorbitant power tariffs, separating of the liquefied natural 
gas (LNG) facility, restructuring of DPC and allowing sale of excess power 
through central utilities, mainly the National Thermal Power Corporation 
(NTPC), sources said. The DPC board had late last month authorised the local 
manager in India to issue termination notice to MSEB following a bitter 
payment controversy. DPC has already slapped one conciliation notice on the 
Centre and three arbitration notices on the state government over non-payment 
of dues.
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THE TIMES OF INDIA, Friday, May 04, 2001 
Salve may represent Centre on Enron talk panel 

Solicitor General Harish Salve is likely to be named the Centre's 
representative on the high-power committee appointed by the Maharashtra 
government to renegotiate the power purchase agreement (PPA) with US energy 
giant Enron-promoted Dabhol Power Company (DPC). According to highly placed 
government sources, Salve's name had been cleared by both ministries of 
finance and power. The Maharashtra government has appointed a negotiating 
committee headed by former bureaucrat Madhav  Godbole to renegotiate the 
estranged PPA signed by  Maharashtra State Electricity Board (MSEB) and DPC. 

Enron had made opening of talks with Maharashtra conditional on the presence 
of Centre's representative on the negotiating committee. Salve would meet 
secretaries in the ministries of finance, power and law to firm up Centre's 
stand on the crisis arising out of payment defaults by MSEB, sources said, 
adding petroleum secretary is also likely to be included in the panel. 
Sources said that Enron appeared to be keen on solving the present impasse 
through negotiations judging from corporation chairman Kenneth Lay's 
statement on Wednesday in Houston that the company had no plans to sell its 
stake in the $2.9 billion Dabhol project. (PTI)
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THE PIONEER, Friday, May 04, 2001, 
Enron talks: Salve may be Govt man 

Solicitor General Harish Salve is likely to be named as Centre's 
representative on the high-power committee appointed by the Maharashtra 
Government to renegotiate the Power Purchase Agreement (PPA) with US energy 
major Enron-promoted Dabhol Power Company. According to sources, Mr Salve's 
name has been cleared by the Ministries of Finance and Power. The Maharashtra 
Government recently appointed a committee headed by former bureaucrat Madhav 
Godbole to renegotiate the 
PPA signed by the Maharashtra State Electricity Board (MSEB) and DPC.
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MID DAY, Friday 4 May 2001
Enron's rates too high: MSEB

The Maharashtra State Electricity Board (MSEB) is planning to convey  to the 
Dabhol Power Company (DPC), a subisidiary of US energy giant  Enron, its 
inability to pay increased fixed charges at the rate of Rs 500  crore a month 
from next year. MSEB officials said that DPC would be  informed about this 
during re-negotiation of the power purchase  agreement (PPA).  As per PPA, 
the increased rate will come into effect from January,  2002 following 
completion of DPC's 1,444 MW second phase of the  project in October this 
year. The PPA also says that the fixed rate will  have to be paid to the 
company irrespective of the consumption of  electricity. 

 At present MSEB is paying fixed chages of Rs 95 crore a month to  DPC for 
its first phase of the project, generating 740 MW power.  ''We have been 
raising this issue with DPC for last couple of months,  highlighting that 
this (fixed charges from next year) is not viable for  us. Even state Chief 
Minister Vilasrao Deshmukh raised the issue in  New Delhi at a meeting 
recently'', the officials said. The board will continue to raise this issue 
during the re-negotiation  process with DPC. However, DPC officals are 
keeping mum over the  issue, adopting a 'Wait and Watch' policy, they added.  
Under the second phase of the project, 722 MW power generating  capacity will 
be achieved by June and remaining 722 MW by October  this year, the officials 
said.