World Watch
The Wall Street Journal, 04/23/01

PG&E's Glynn Commits Chain of Errors Before Unit's Cash Crisis
Bloomberg, 04/23/01

Massive power plant proposed
Associated Press Newswires, 04/23/01

UK: UPDATE 1-Saudi Naimi to meet US Energy Secretary this week.
Reuters English News Service, 04/23/01

INDIA: UPDATE 1-Enron's India unit, lenders to meet on payment row.
Reuters English News Service, 04/23/01

INDIA: Promoters cut Indian power project capacity-paper.
Reuters English News Service, 04/23/01

ONGC DISPUTES ENRON'S CLAIM ON MOON PROSPECT PROJECT AT TAPTI
Asia Pulse, 04/23/01

Mangalore missive asks Baligar to set records straight
The Times of India, 04/23/01

Government to change market rules in order to make electricity sector more 
competitive
Expansion, 04/23/01

DPC seeks OK to exit power project
Business Standard, 04/23/01



International
World Watch
Compiled by David I. Oyama

04/23/2001
The Wall Street Journal
A15
(Copyright (c) 2001, Dow Jones & Company, Inc.)

ASIA/PACIFIC 
Kookmin Bank Formal Merger Expected 
The formal merger of South Korea's two largest retail banks, Kookmin Bank and 
Housing & Commercial Bank, will create the country's largest financial 
institution. But uncertainty over who will become president of the new 
entity, which also plans to list on the New York Stock Exchange in October, 
could still disrupt the merger process, officials involved in the deal say. 
The presidents of the two lenders are expected to sign a binding merger 
agreement today, creating a bank with combined assets of 161 trillion won 
($124 billion). Foreign investors will have a combined 60% stake. Goldman 
Sachs Group will hold a 9.95% interest, making it the largest shareholder of 
the merged bank, which will be called Kookmin Bank. The government will hold 
a 9.36% stake. 
Japan to Probe Polyester-Fiber Dumping 
Japan's government said it will begin an investigation into allegations that 
South Korean and Taiwanese makers were dumping certain types of polyester 
fiber on the Japanese market, marking the latest effort to protect some 
embattled Japanese industries. The finance and economy ministries said they 
received requests this year from five Japanese makers to impose antidumping 
duties on the Korean and Taiwanese imports, and have found enough evidence to 
embark on a formal inquiry. 
Dabhol Holders May Review India Project 
Shareholders of Dabhol Power, a unit of Enron of the U.S., will meet 
Wednesday in London to possibly discuss the future of Dabhol's 2,184-megawatt 
power project in India's Maharashtra state, an Enron India spokesman said 
Saturday. Enron has a 65% stake in the $3 billion project; the Maharashtra 
State Electricity Board owns 15%, and General Electric and Bechtel of the 
U.S. each hold a 10% stake in Dabhol. 
BRIEFLY: 
-- Citing market weakness, Taiwan's Chunghwa Telecom again postponed a 
planned U.S. share offering, the latest setback in efforts to privatize the 
company. The decision likely means Chunghwa will have to reapply to Taiwan's 
security regulator for the U.S. share offering. 
-- Pakistan plans to sell a further 26% stake in Pakistan Telecommunications 
to a private investor; bids will be due by June 30. The government will keep 
a 62% stake. 
-- Taiwan's central bank cut the discount and secured-loans rates by 0.125 
percentage point to 4.0% and 4.375%, respectively, its fifth rate reduction 
in as many months. 
-- Kawasaki Steel said Friday it will likely join in talks on a business link 
between NKK and the steel unit of Germany's ThyssenKrupp. NKK and Kawasaki, 
Japan's No. 2 and No. 3 steelmakers, last week said they plan to merge 
operations beginning in October 2002. 
-- Time Magazine apologized to its Muslim readers after demonstrators in 
India's Kashmir region last week protested an image of the prophet Muhammad 
in its April 16 issue and Malaysia pulled the issue from newsstands. The 
editor of Time's Asia edition said the image was an "unintentional affront to 
the Islamic faith," which considers such images blasphemy.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


PG&E's Glynn Commits Chain of Errors Before Unit's Cash Crisis
2001-04-23 03:07 (New York)

PG&E's Glynn Commits Chain of Errors Before Unit's Cash Crisis

       (Published in May issue of Bloomberg Markets.)

     San Francisco, April 23 (Bloomberg) -- When Robert Glynn
addressed PG&E Corp.'s shareholders for the first time as chief
executive, he told them he saw only one way for the price of
electricity to go in California: lower.
     ``There is no product bought on a daily basis that has such a
predictable downward price trajectory,'' he said at the 1998
annual meeting, held at San Francisco's Masonic Auditorium. Retail
prices would drop 20 percent by 2001, he predicted.
     How wrong Glynn turned out to be.
     Since June 2000, wholesale prices in California have jumped
sixfold. Utilities such as PG&E were barred from passing the
increased costs on to customers when the state's electricity
industry was deregulated in 1996.
     Glynn's misreading of the market was just one step in a chain
of events that led him, in April, to steer the company's Pacific
Gas & Electric Co. unit into Chapter 11 -- the biggest bankruptcy
filing by a utility in U.S. history.
     Saying that electricity prices would fall, Glynn, 58,
embraced deregulation -- the very same law that business leaders,
politicians, and editorialists have recently condemned.
     With the help of proceeds from the asset sales required under
deregulation, Glynn, who became CEO of PG&E in June 1997, pushed
the San Francisco-based company into new markets.
     PG&E developed a nationwide energy sales and trading business
and, through $3.5 billion in acquisitions, became a power producer
in New England and a natural gas provider in Texas.

                    PG&E Goes Up Against Enron

     As PG&E expanded outside California, it butted heads with the
likes of Enron Corp. -- and often came out on the losing end. Last
year, PG&E sold its Texas natural gas business for $840 million,
less than half the price it had paid.
     The company also sold a unit that managed energy use for
corporate customers after racking up more than $120 million in
losses.
     Some analysts and investors are fed up with Glynn's
management. ``He's put the company in some difficult situations,''
said Jeffrey Gildersleeve, an analyst at Argus Research who has a
``hold'' rating on the company's stock. ``There has been a lot to
swallow.''
     PG&E's stock, which has traded as high as $35.06 during
Glynn's tenure, dropped to $6.50 shortly after the bankruptcy
filing. It closed last Friday at $8.90, down 56 percent since the
start of the year. Bond prices have also declined.
     Pacific Gas & Electric's 7.375 percent bonds due in 2005 have
fallen to 65 cents on the dollar from about 90 cents last
November. For 2000, the company had a net loss of $3.36 billion
after taking a $4.11-billion charge for power-purchase costs.
Revenue rose 26 percent to $26.2 billion.

                  Early Proponent of Deregulation

     Glynn was an early proponent of deregulation. He told
legislators before the bill passed in 1996 that it would allow
PG&E to raise cash to pay off debt as well as to expand outside
the state.
     ``Glynn, more than anyone else on earth, invented the idea
that it was a good risk for utility shareholders to take,'' said
California Senator Steve Peace, a Democrat who co-wrote the law.
     A native of Orange, New Jersey, Glynn joined Pacific Gas &
Electric in 1984 after being with Long Island Lighting Co. and
Woodward Clyde Consultants, an engineering company now owned by
URS Corp.
     He became the utility's president in June 1995 and was named
PG&E's president when the holding company was formed in January
1997. He now serves as chairman, CEO, and president of PG&E, as
well as chairman of the utility unit.
     Under deregulation, PG&E had to sell its 89 California power
plants, including the Diablo Canyon nuclear plant, and buy most of
its electricity though a state-run market.

                       Special Sale of Bonds

     In return, the state allowed Pacific Gas & Electric to sell
$2.9 billion of bonds in November 1997 that were backed by a
special charge on utility bills. The proceeds covered the costs of
building the plants and offset a required 10 percent rate cut.
     From 1997 to 1999, PG&E raised an additional $1.5 billion
through plant sales to Duke Energy Corp., Southern Co., and
Calpine Corp.
     It also built up a business in power generation, energy
trading, and natural gas transmission outside California. Its
National Energy Group unit was North America's fourth-biggest
marketer of power last year.
     In 1997, PG&E spent $1.55 billion to purchase 18 power plants
in Massachusetts, New Hampshire, Rhode Island, and Vermont from
New England Electric System.

                         Moving Into Texas

     That same year, the company moved into Texas by buying Teco
Pipeline Co. for $380 million and then bought San Antonio-based
Valero Energy Corp.'s natural gas pipelines and processing
facilities for $1.5 billion.
     The company's PG&E Energy Services arm, called Vantus Energy
Corp. when it was started in 1995, was growing as well. The
business won contracts in 1997 to supply 800 McDonald's Corp.
restaurants in California with discounted power and to manage
energy billing for 35 Neiman Marcus Group Inc. stores throughout
the U.S.
     Gregory Phelps, manager of John Hancock's Patriot Group of
Funds, says PG&E expanded too fast and neglected its main
business: selling natural gas and electricity in California.
     ``They were out bidding on just about every generation asset
that came on the market,'' said Phelps, whose fund sold its PG&E
stake in the mid-1990s. ``They took their eyes off their own
backyard.''

                           Losses Mount

     As losses mounted across its businesses, PG&E began
retrenching. In 1998, the company pulled out of Australia, which
it had entered two years earlier by acquiring a natural gas
pipeline and other assets from the Queensland state government for
$128 million. PG&E sold that business to Duke Energy and took a
$23-million charge on the sale.
     In January 2000, the company agreed to sell its Texas natural
gas business to El Paso Energy Corp. The sale, completed in
December, produced an $890-million charge.
     PG&E got out of energy services last June, when Enron bought
the unit's contracts for $85 million and Chevron Corp. acquired
its energy-management business for $18 million.
     Now Glynn is turning his focus from building a business to
protecting it. He rejected state officials' demands that he sell
PG&E's power transmission lines in return for help in paying off
more than $9 billion in debt from power buying.
     It's a risky strategy. Proceedings under U.S. bankruptcy
judge Dennis Montali may take years to play out. Creditors will be
eager to get their hands on the 30 power plants and other assets
owned by National Energy, which produced 17 percent of PG&E's
operating profit during the first nine months of 2000.

                     Insulated From Bankruptcy

     Glynn has said the unit is insulated from the bankruptcy.
Others disagree, including Kenneth Klee, an acting law professor
at the University of California, Los Angeles, who co-wrote the
1978 U.S. Bankruptcy Code.
     Klee says creditors may be able to tap the assets if they can
prove that Pacific Gas & Electric fraudulently transferred money
earmarked for the utility to its parent. ``This might be the most
fruitful course of action,'' he said.
     PG&E's investors will have to hope Glynn is better at
interpreting the law than he is at predicting electricity prices.

--Peter Robison in Seattle (206) 224-3558 or robison@bloomberg.net
with reporting by Stacie Babula in Princeton, Liz Goldenberg in
New York, Jim Polson in Princeton, Jeff St. Onge and David Ward in
San Francisco, and Daniel Taub in Los Angeles/dw



Massive power plant proposed

04/23/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

LAS ANIMAS, Colo. (AP) - Tri-State Generation & Transmission has proposed a 
1,200-megawatt coal-fired power plant, at a cost estimated at $1.3 billion, 
for Bent County. 
The proposed plant would be more than twice as big as any other power plant 
planned for Colorado, and could assure Bent County's economic base for years 
to come. It also could provide an insurance policy for Colorado's strained 
power grid.
It is the right time for a new coal plant because natural gas has become an 
expensive and volatile way to make elctricity, while new technology has 
cleaned up the coal-burning process, Tri-State said. 
"We'd incorporate the most stringent environmental controls that exist. If 
you're burning high quality coal like either of our sources would provide, 
and using all the best available technology, you're removing nearly 
everything before it hits the stacks," said Tri-State spokesman Jim 
VanSomeren. 
The utility estimates that while mid-April prices for natural gas-generated 
electricity were 5 cents per kilowatt-hour, coal-produced power could be as 
low as 1.5 cents. 
The company sells power to city-owned utilities and rural electric 
cooperatives in four states and plans to go ahead with the Las Animas plant 
if it lands the state permits and can sell shares of the power to Xcel and 
other utilities. 
Environmental critics of coal say they probably can't stop the plant from 
opening by 2007, but global warming and the heated debate over Western power 
give them a better forum to object than when the last generation of coal 
plants came online. 
"The real argument to stopping a plant like that is that there are cleaner 
and cheaper ways to provide electricity in the region," said John Nielsen, 
co-director of energy issues at the Land and Water Fund in Boulder. Nielsen 
pointed out the irony of the new coal plant being proposed for a site just 30 
miles west of a 120-megawatt, pollution-free wind power project to be 
finished by Enron later this year. 
"You can make the region a center for clean power, or the center for a new, 
large coal plant," Nielsen said. "Both will bring jobs. One will bring 
environmental impacts and one won't." 
Kim McDonnell of the Bent County Development Foundation worked with Tri-State 
and local officials to ensure land, water, rail and other building blocks are 
ready. 
Estimates are that the project could be the source of up to 1,000 workers 
during construction, and 350 for operations later on. The biggest current 
employer in Bent County, the Fort Lyon VA hospital that is converting to a 
prison, has 175 employees. 
Tri-State general manager Frank Knutson acknowledged that when the plant 
comes online, there may be a window of a few years when Colorado wouldn't 
need all the electricity and the company would seek buyers elsewhere to 
recoup its costs. But the economics and planning of the Las Animas site will 
be based on Colorado demand, he said.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


UK: UPDATE 1-Saudi Naimi to meet US Energy Secretary this week.

04/23/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, April 23 (Reuters) - Saudi Oil Minister Ali al-Naimi will meet U.S. 
Energy Secretary Spencer Abraham in Washington later this week, the first 
meeting between the two officials, diplomats said on Monday. 
They said the meeting, due to take place on Thursday or Friday, would allow 
Naimi to meet face-to-face with his U.S. counterpart, who assumed office as 
part of the George W. Bush administration in January.
The two officials are likely to discuss oil prices in the wake of OPEC's 
decision to curb output twice this year by 2.5 million barrels per day (bpd), 
or about nine percent. 
Oil prices have found support from tight U.S. gasoline supplies which 
threaten a repeat of last summer's price spike at the pumps. Saudi Arabia is 
the leading supplier to the United States, the world's biggest oil consumer. 
Abraham has taken a low-key approach towards the Organisation of the 
Petroleum Exporting Countries - a marked departure from former energy 
secretary Bill Richardson who lobbied OPEC ministers during their meetings. 
But Washington has made clear it does not want to see sky-high oil prices 
further eroding U.S. economic growth. 
OPEC members, who last year enjoyed the biggest oil boom in two decades, have 
said they would cut output again if prices fall below a $22 price floor for 
their basket of seven crudes. 
The basket is currently around OPEC's preferred level of $25 a barrel. 
OPEC power Saudi Arabia, the world's biggest oil exporter and producer, has 
said the oil cartel would move swiftly to raise output again if prices pushed 
above the $28 upper limit of the group's target range. 
SAUDI INVESTMENT 
The oil officials' meeting comes as Riyadh prepares to award multi-billion 
dollar contracts for Saudi gas developments. 
U.S. oil company ExxonMobil is a leading contender to win an operatorship for 
at least one of the three projects on offer, industry sources have said. 
U.S. oil companies Conoco , Chevron , Phillips , Marathon and Enron/Oxy - 
along with several European rivals - are also expected to play a role in the 
investment. 
Naimi is scheduled to speak at an energy conference in Paris on Wednesday and 
travel from there to Washington. He is due in Houston on May 3 to attend a 
Saudi Aramco board meeting, industry sources said.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


INDIA: UPDATE 1-Enron's India unit, lenders to meet on payment row.

04/23/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, April 23 (Reuters) - The Indian unit of U.S. energy giant Enron Corp 
and its lenders will meet in London on Monday for crucial talks on an ongoing 
payment row with Maharashtra state which is preparing to lobby the federal 
government for support. 
The meeting will be attended by both foreign and local lenders of the Dabhol 
Power Company (DPC), which is facing a cash crunch as the Maharashtra State 
Electricity Board (MSEB) has defaulted on payments worth 2.26 billion rupees 
($48.31 million).
Indian media had speculated over the last few days that DPC - 65 percent 
owned by Enron - would seek lenders' permission in Monday's meeting to wind 
up operations in India ahead of its own board meeting later this week. 
"The meeting is crucial as the DPC board is meeting on April 25 to consider a 
termination notice to the MSEB... it cannot do this till it gets lenders' 
permission," the Business Standard newspaper said on Monday. 
DPC's board is due to meet in London on Wednesday. 
The DPC spokesman in Bombay declined to comment on the board meeting but said 
the purpose of Monday's meeting was to update the lenders on the payment 
situation. 
DPC has already issued a notice saying it was prepared to fight the 
non-payment issue legally and has demanded that the federal government made 
good the defaults as promised in the original agreement of the mid-1990s. 
Enron is the largest single foreign investor in India. 
It is setting up a $2.9-billion, 2,184-MW power project in the western state 
of Maharashtra through DPC. 
The project's first phase of 740 MW is in operation while the second phase of 
1,444 MW is expected to be commissioned later this year. 
The dispute comes as India is facing a severe shortage of power and cannot 
afford to put off foreign investors. 
The chief minister of Maharashtra state is preparing to lobby India's 
coalition government for support on his government's stand in the 
controversy. 
Vilasrao Deshmukh left for New Delhi on Monday afternoon to meet Finance 
Minister Yashwant Sinha and Power Minister Suresh Prabhu. 
Deshmukh's government, under intense pressure from a rag-tag bunch of allies 
to scrap Enron's project, wants the federal government to take over purchases 
of electricity from the power plant and relieve the state utility of the 
payment problem. 
(US$ = 46.78 Indian rupees).

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


INDIA: Promoters cut Indian power project capacity-paper.

04/23/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW DELHI, April 23 (Reuters) - The developers of a 1,000 megawatt coal-fired 
power project in southern India have decided to halve the project capacity, 
partly to "avoid another Dabhol-like situation", an Indian financial daily 
reported on Monday. 
Dabhol Power Co, majority owned by U.S. energy giant Enron Corp , operates a 
controversy-ridden 2,184 MW (megawatt) power plant in the western Indian 
state of Maharashtra. The state utility board has defaulted on paying for 
power provided by Dabhol, and Enron now reportedly moving toward bailing out 
of the Maharashtra power project.
The Business Standard newspaper said, citing unnamed sources, that the 
promoters of the Mangalore Power Company (MPC) had decided to scale down the 
project by half because of a lack of demand and the weak financial state of 
the state's electricity board. 
China Light & Power and the Tatas, one of India's leading conglomerates, are 
the main promoters of the Mangalore power project. 
"The initial assumptions for growth in demand for power in Karnataka were 
highly optimistic," the paper quoted unnamed sources as saying. "...Karnataka 
will be able to absorb only an additional 500 MW of power immediately." 
"Consequently the project is likely to be implemented in only two stages. 
However, the decision on this has not been taken," sources were quoted as 
saying. 
The promoters now propose to set up the second phase only after three to four 
years when demand for power improves, the paper said. 
MPC, to be built at an estimated cost of over 50 billion rupees ($1.069 
billion) with a debt equity ratio of 70:30, has had its share of 
controversies. 
In 1999 the original promoter, the U.S.-based power major Cogentrix, walked 
out of the project citing delays in government clearances. Hong Kong-based 
China Light and Power, then a minority partner in the project, took over and 
later roped in the Tatas. 
The project, originally cleared as a fast-track power project, was to receive 
a counter-guarantee from the federal government. 
The guarantee hasn't materialised as the government is hesitant to do so 
because of the state of the finances of the state electricity board, the 
paper indicated. 
(US$1 = 46.775 rupees).

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


ONGC DISPUTES ENRON'S CLAIM ON MOON PROSPECT PROJECT AT TAPTI

04/23/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, April 23 Asia Pulse - The state-owned Oil and Natural Gas 
Corporation (ONGC) has virtually dismissed the US$15 million Moon Prospect 
gas well project at Tapti fields saying there was no substantial recovery 
contrary to claims of a big find by the joint venture parnter, Enron. 
"Enron, which is the operator of the field, has not shared results of the 
ambitious Moon Prospect gas well project with JV partners - ONGC and 
Reliance. The project seemed to have turned into a hollow gas well," senior 
ONGC officials said.
Significantly, the setback on Moon Prospect comes at a time when Enron has 
put its 30 per cent stake in the JV on the bloc. 
ONGC has 40 per cent stake in the US$900 million venture while Reliance has 
30 per cent stake. Tapti, along with Panna-Mukta oil and gas fields, was 
awarded to the consortium of ONGC-Enron-Reliance in 1992 for exploration. 
Enron has claimed 1.5 trillion cubic feet of gas reserves in place, of which 
25-30 per cent are recoverable reserves, sources said, adding "We, however, 
feel there aren't substantial reserves in place for commercial exploitation." 
After over three months of drilling and spending US$15 million, the well 
reached the final depth but not substantial hydrocarbon reserves have been 
struck, they said. 
"Though sophisticated and expensive techniques has been used for drilling and 
logging, so far the well has not brought about any reliable information about 
the possibliy of hydrocarbons," sources added. 
(PTI) 23-04 1817

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Mangalore missive asks Baligar to set records straight
Stanley G. Pinto

04/23/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MANGALORE: Mangalore Gramantara Parisarasaktha Okkoota (MGPO) president 
Upendra Hosbet has sent a letter to Karnataka Power Transmission Corporation 
Chairman V.P. Baligar seeking clarifications on the power situation in the 
state, with specific reference to shortages, production, demand, transmission 
and distribution (T&D) losses and pilferage. 
According to him, energy department officials have been consistently issuing 
contradictory statements which has left the public bewildered about the 
actual situation.
Firstly, Hosbet quotes Baligar's recent press statement that KPTC ``may not 
require power from Orissa,'' if either the RTPS fifth unit resumes 
functioning or the Tannir Bhavi barge-mounted power plant is commissioned by 
April 30. 
``Does this mean that before the RTPS fifth unit crashed, there was no power 
shortage? Also, if there is power from this RTPS unit, is the Tannir Bhavi 
project not required?'' Hosbet asked and demanded to know the rationale 
behind the setting up of the 220-MW Tannir Bhavi plant, from which the KPTC 
cannot refuse to buy power as per a recent High Court order. 
Hosbet also wanted to know the ``real cost'' of power purchased from Tannir 
Bhavi. ``Baligar has said that the cost per unit of power is Rs 4.50, but 
energy secretary K.P. Pandey said it is Rs 5. Meanwhile, a KPTC officer here 
said during the public hearings on tariff hike by the Karnataka Electricity 
Regulatory Commission that it should be nearly Rs 6 as the price depends on 
the naphtha and dollar rates!'' he said. 
Hosbet asked Baligar: ``If Enron's offer of Rs 4.60 per unit is costly as per 
your statement, how is the Tannir Bhavi rate cheap, considering the 
additional cost of Escrow cover?'' 
Hosbet pointed that the Tannir Bhavi project was cleared by the government on 
the grounds that though the power produced was costly, it would be available 
in a very short time (reportedly six months). ``Though the power purchase 
agreement (PPA) was signed in October 1997, the plant has still not generated 
a unit till now. Any small power plant could have been set up in Bangalore 
within this time at a lower cost and with minimum T&D losses,'' he observed. 
On the issue of actual power requirement and production in the state, Hosbet 
said former energy secretary P.S.S. Thomas had declared in July 2000 that the 
state produces 85 million units (MU) per day, against the requirement of 55 
MU. ``He said the state has been producing 12 to 15 per cent more than 
requirement since 1999. Was this not the reason behind the KPTC offering 
power at reduced rate of Rs 3.25 per unit to the industrial users since 
January 1999?'' he asked. 
But in April 2001, Baligar said the state produces only 57.244 MU against a 
requirement of 95 MU. Hosbet said this means between July 2000 and April 
2001, production had gone down by 30 MU and demand had gone up by 40 MU -- 
despite some new power plants starting production and power requirement 
coming down due to industrial slowdown. 
``All these statements are contradictory in nature. Seasonal variations may 
cause drop in production, but this drastic drop needs some explanation,'' he 
contended. 
Can Baligar answer these questions?

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Government to change market rules in order to make electricity sector more 
competitive (El Gobierno cambiara las reglas del mercado electrico para 
hacerlo mas compeitivo)

04/23/2001
Expansion
Copyright(C) 2001 Abstracted from Expansion in Spanish, Source: World 
Reporter (TM)

The Spanish government wants to carry out an "extensive revision" of the 
operation of the country's electricity market by drawing up rules which will 
increase competition and enable new operators to enter the market, ending the 
dominance of Endesa, Iberdrola, Union Fenosa and Hidrocantabrico, the Spanish 
electricity companies. The Spanish energy commission (CNE) supports this 
initiative. Last week, the government approved several changes to the 
operation of the electricity production market (known as the pool). These 
will adapt the liberalisation system which was approved last June, which aims 
to increase the transparency of electricity buying and selling operations. 
The government has asked Omel, the company which operates the pool, to 
present a proposal for the reform of the market. Changes to have been minimal 
since the market was liberalised in 1998. Endesa and Iberdrola still 
dominate, with an 80 per cent share. According to the restrictive practices 
court, the market is not very transparent or competitive, while CNE has 
recommended that the rules be changed in order to create a more transparent 
and efficient market. Companies such as Gas Natural, EDF, Electrabel, Enron 
and Sempre, want to be part of the pool by buying and selling electricity, 
but complain that Endesa and Iberdrola's dominance enables them to charge 
whatever price they want. The pool has, however, been at its cheapest in 
recent months, owing to increased hydraulic production.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


DPC seeks OK to exit power project
Tamal Bandyopadhyay & S Ravindran Mumbai

04/23/2001
Business Standard
1
Copyright (c) Business Standard

The Enron-promoted Dabhol Power Company (DPC) is seeking the approval of its 
25 lenders to pull the plug on the $3 billion power project in Maharashtra 
tomorrow (April 23). The meeting has been convened in London at the 
initiative of the company. 
The meeting is crucial as the DPC board is meeting on April 25 in London to 
discuss the issue of serving a termination notice to the Maharshtra State 
Electricity Board (MSEB). DPC cannot go ahead with this unless it gets the go 
ahead from the lenders. While bankers said the lenders' meeting is about the 
second phase of the project, which is still under construction, state 
government officials clarified that since there is only one PPA covering both 
phases of the project, the lenders' decision will be applicable to the 
existing Phase I also. The second phase of the project involves 1,444 MW 
generation capacity, whereas Phase I of 740 MW is already operational.
"According to the loan agreement, even if only four per cent of the lenders 
agree to terminate the contract then DPC can do so," highly placed sources in 
the lenders' consortium said from London. This in effect means that only one 
lender has to agree for DPC to serve a preliminary termination notice. 
Following the notice, there is a cooling off period of six months for both 
parties (the MSEB and DPC) to find a mutually acceptable solution, which may 
take the form of a re-negotiated PPA, sources added. 
Sources also said that there are two separate meetings scheduled with 
lenders. The Monday meeting will be attended by all the lenders including 
multilateral funding agencies like Japanese Exim Bank and OPIC. The second 
round of meetings schedule for Tuesday will be only with the global loan 
arrangers ANZ Investment Bank, CSFB, ABN -AMRO, Citibank and the SBI. Two 
representatives each from the Indian lenders, IDBI, ICICI and SBI have 
already left for London.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.