Poland-Norway Gas Deal Might Hit Mkt Liberalization
Dow Jones Energy Service, 04/27/01
Peoples Energy Reports Second Quarter Results Reaffirms Fiscal 2001 Estimate
PR Newswire, 04/27/01
Report: Enron official given authority to end power project in India
Associated Press Newswires, 04/27/01
State employees' retirement funds benefitting from power crisis
Associated Press Newswires, 04/27/01
DHABOL BOARD EMPOWERED TO END POWER CONTRACT WITH INDIAN STATE
Asia Pulse, 04/27/01
NO ADVERSE FALLOUT TO COME FROM ENRON DECISION: INDIAN MINISTER
Asia Pulse, 04/27/01
India: Starving oneself to stuff others?
Business Line, 04/27/01
HEADING
The Times of India News Service, 04/27/01

Success of state bandh isolate BJP
The Times of India, 04/27/01

Additional power for Delhi promises Prabhu
The Times of India, 04/27/01

Enron ready to pull out, but lenders say wait
The Times of India, 04/27/01

India's single largest foreign investor threatens to pull out
Agence France-Presse, 04/27/01

Indian Utility Pays $28 Million March Bill To Enron
The New York Times, 04/27/01

DAILY BRIEFING
The Atlanta Constitution, 04/27/01

Business Brief -- Enron Corp.: Sale of Utility Subsidiary To Sierra Pacific 
Is Canceled
The Wall Street Journal, 04/27/01

Indian State to Pay Enron for March Supply
Asian Wall Street Journal, 04/27/01

Colombia Suspends Isagen Sale Pending Court Ruling, Papers Say
Bloomberg, 04/27/01


Poland-Norway Gas Deal Might Hit Mkt Liberalization
By Joe Harper
Of DOW JONES NEWSWIRES

04/27/2001
Dow Jones Energy Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

WARSAW -(Dow Jones)- Poland will limit its chances of developing a flexible 
and diversified gas market if the government goes ahead with a long-awaited 
gas import deal with Norwegian and Danish companies, said a participant at 
the Power in Poland conference in Warsaw this week. 
"Entering into long-term guaranteed take-or-pay contracts with Norwegian and 
Danish partners would result in the incumbent contract holders having an 
incentive to delay domestic gas market liberalization at any cost," said 
Jarek Astramowicz, president of Enron Poland, the Polish unit of the U.S.'s 
Enron Corp. (ENE).
The incumbent contract holder - Poland's gas monopoly Polskie Gornictwo 
Naftowe i Gazownictwo (R.PGN), or PGNiG - said recently it will sign a 
long-term, guaranteed take-or-pay contract with Norway's state oil company 
Statoil AS (Y.DNS) and Danish state-owned oil and gas utility DONG in May. 
The three parties are negotiating a trade deal that could see between five 
and eight billion cubic meters (bcm) a year exported from Norway and Denmark 
to Poland by 2007. 
According to Polish press reports Statoil reportedly wants financial 
guarantees from the Polish government before signing any sales agreement with 
PGNiG. The Norwegians also said they need to sell at least eight bcm of gas a 
year to Poland to make the project financially viable, while the Polish side 
has said it wants to import only 5 bcm a year. 
PGNiG president Andrzej Lipko said this week PGNiG and Statoil were 
"negotiating intensively," but didn't say when a deal might be signed. 
Astramowicz said the deal would reduce the Polish side's room for maneuver in 
future gas importation and corner Poland into accepting gas at higher prices 
than it could find on E.U. markets when the Polish and E.U. grids are fully 
interconnected. 
Enron, like other traders, operates best in markets where there is greater 
liquidity, and the Norway deal would dry up considerable amounts of potential 
liquidity. 
Astramowicz added that the Polish market would be oversupplied if the deal 
goes ahead, pushing up end-user prices. 
And it's the projected increases in demand for gas in Poland over the next 10 
years that presents the major problem. 
Barbara Litak-Zarebska, Deputy Treasury Minister, said this week gas demand 
projections were largely based on an expected rapid shift from coal-powered 
to gas-powered electricity generation in Poland. 
Poland's Economy Ministry estimates the country's current annual gas 
consumption at 10.5bcm-11 bcm, and expects this total to reach 18.4 bcm by 
2010, including 6.1 bcm to be consumed by the newly constructed, gas fired 
power plants. 
Astramowicz said this projection was too high, claiming the power sector was 
likely to take only 2.5bcm-3.5 bcm by 2010. 
"Furthermore, power generated from gas cannot compete with power generated by 
coal-fired power plants in price terms. Therefore, this source of increase in 
gas demand will not materialize in the near future," he said. 
As an alternative to the Norway deal Astramowicz pointed to western European 
gas trading hubs already offering flexible gas supply contracts with terms of 
up to ten years. 
"For example, competitively priced gas supplies based on the contracts 
executed in Zeebrugge (Belgium) or Emden (Germany) are already reaching 
customers in eastern Germany today and, as Polish gas consumption grows, 
could easily be used to source any additional gas supplies needed for 
customers in Poland," said Astramowicz. 
He also pointed to potential import price advantages from the E.U. He said 
gas imported from the E.U. would cost about $135/1000cm, against a price on 
the current Yamal contract of $120/1000cm and a Norwegian gas price 
(including the estimated transmission charge to the Polish border of 
$20/1000cm), of $150/1000cm. 
PGNiG's Lipko said that imported Russian gas prices would not be $30 cheaper 
than Norwegian supplies once a pipeline linking the two countries had been 
built. 
By Joe Harper, Dow Jones Newswires; 48-22 622-2766; joe.harper@dowjones.com

Peoples Energy Reports Second Quarter Results Reaffirms Fiscal 2001 Estimate

04/27/2001
PR Newswire 
(Copyright (c) 2001, PR Newswire) 

CHICAGO, April 27 /PRNewswire/ -- Peoples Energy (NYSE: PGL) reported today 
that its second quarter earnings for the three month period ended March 31, 
2001 were $62.5 million, or $1.77 per share, up from $57.4 million, or $1.62 
per share for the same period a year ago. For the most recent six month 
period, earnings were $98.8 million or $2.80 per share, compared to $87.0 
million, or $2.45 per share for the same period last year. 
Quarterly and fiscal year-to-date results were positively impacted by weather 
that was colder than the prior year periods by 19% and 23%, respectively, 
offset by the negative impact of gas prices that were at record levels. The 
combined effect of these two factors is reflected in current accounts 
receivable balances, which are significantly higher than a year ago. The 
company has implemented several flexible payment programs and is actively 
pursuing collection of past due amounts.
"We are pleased with the results from our gas distribution business despite 
challenging circumstances and with the continuing growth from our diversified 
business segments," said Richard E. Terry, chairman and chief executive 
officer. "We are reaffirming our earlier fiscal 2001 earnings estimate of 
$3.05 to $3.15 per share, assuming normal weather and planned utility 
performance for the rest of the year. The South Texas oil and gas property 
acquisition that we announced today will add $.10 to $.15 per share to that 
projection." 
Peoples Energy reported second quarter and fiscal year-to-date results for 
its primary business segments: 
Gas Distribution. Operating income was $101.6 million for the second quarter 
and $180.0 million for the six month period, as compared to $98.9 million and 
$156.3 million, respectively, in the prior year. The increases were mainly 
due to colder weather, reduced depreciation expense, and the positive effects 
of pension benefit accounting, offset by increases in the provision for 
uncollectible accounts and customer conservation resulting from higher gas 
costs in the current periods. 
Power Generation. Operating income and equity investment income grew to $5.6 
million and $6.0 million for the current quarter and fiscal year-to-date 
periods compared with $572,000 and $3.9 million, respectively, in the 
previous fiscal year. These increases of $5.0 million and $2.1 million, 
respectively, are primarily due to a gain on the liquidation of financial 
hedges associated with Elwood's gas supply requirements and increased 
capacity revenues during the second quarter, offset in part by higher gas 
costs in both current periods. Effective March 1, 2001, the power sales 
contracts on the Phase I Elwood units were restructured as tolling 
agreements. 
Midstream Services. Operating income and equity investment income was $5.0 
million and $10.6 million for the current quarter and six month periods, 
compared to $5.8 million and $8.1 million, respectively in the year-ago 
comparable periods. Results in the current periods were positively impacted 
by equity income from our enovate partnership with Enron, offset by lower 
operating income from hub and peaking activities. Operating income from 
wholesale activities benefited in the prior periods from a nonrecurring 
pipeline construction project. Retail Energy Services. Operating income in 
the second quarter grew to $2.2 million, an increase of $2.3 million over the 
year-ago period. Fiscal year-to-date results reflect an increase of $1.9 
million over the prior period loss of $1.6 million. The current periods 
benefited from increased gas and electric margins, partially offset by higher 
operating expenses related to growth. Both current periods also benefited 
from a one-time change in inventory accounting methods. 
Oil and Gas Production. Operating income and equity investment income was 
$2.8 million and $6.6 million for the current three and six month periods, up 
from $1.7 million and $2.7 million, respectively, in last year's comparable 
periods. These increases were primarily due to the impact of reserve 
acquisitions subsequent to the year-ago periods, positive results from 
drilling programs and higher sales prices on production volumes. The most 
recent six month period reflects increased equity income from our EnerVest 
partnership. 
In addition to the above business segment operating results, net income for 
the current periods reflect higher financing costs resulting from long-term 
debt issued to fund diversified growth and short-term debt incurred for 
utility working capital needs, offset by lower interest on utility long-term 
debt due to prior-year refinancing. The current six month period reflects the 
mark-to-market pricing of unrealized liabilities for stock appreciation 
rights granted to certain employees under the company's long-term incentive 
compensation plan. 
Peoples Energy is a diversified energy company comprised of five primary 
business segments: Gas Distribution, Power Generation, Midstream Services, 
Retail Energy Services, and Oil and Gas Production. The Gas Distribution 
business serves about 1 million retail customers in Chicago and northeastern 
Illinois. Visit the Peoples Energy web site at PeoplesEnergy.com . 
Forward-Looking Information. This press release contains forward-looking 
statements within the meaning of Section 27A of the Securities Act of 1933 
and Section 21E of the Securities Exchange Act of 1934, such as expectations 
of development and growth arising out of the company's diversified energy 
businesses. Actual results could differ materially from such expectations 
because of many uncertainties, including, but not limited to: the company's 
success in identifying diversified energy opportunities on financially 
acceptable terms and generating earnings within a reasonable time; adverse 
resolution of material litigation; developments in the company's utility 
subsidiaries' mercury inspection and remediation program; general U.S. and 
Illinois economic conditions; business and competitive conditions resulting 
from deregulation and consolidation of the energy industry; the timing and 
extent of changes in energy commodity prices and interest rates; and 
regulatory developments in the U.S., Illinois and other states where Peoples 
Energy has business activities. Some of the uncertainties that may affect 
future results are discussed in more detail under "Item 1 - Business" of 
Peoples Energy's Form 10-K for the year ended September 30, 2000. All 
forward-looking statements included in this press release are based upon 
information presently available, and Peoples Energy assumes no obligation to 
update any forward-looking statements. PEOPLES ENERGY CORPORATION 
FINANCIAL HIGHLIGHTS 
(Unaudited) 
Three Months Ended March 31, 
2001 2000 
Total Operating Revenues $1,073,789,000 $525,248,000 
Operating Income $102,370,000 $102,254,000 
Equity Investment Income $11,006,000 $1,972,000 
Net Income $62,491,000 $57,428,000 
Earnings Per Share $1.77 $1.62 
Diluted Earnings Per Share $1.76 $1.62 
Basic Average Shares Outstanding 35,388,000 35,510,000 
Dilutive Average Shares Outstanding 35,450,000 35,511,000 
Six Months Ended March 31, 
2001 2000 
Total Operating Revenues $1,790,771,000 $937,146,000 
Operating Income $173,000,000 $155,928,000 
Equity Investment Income $15,804,000 $6,050,000 
Net Income $98,848,000 $86,999,000 
Earnings Per Share $2.80 $2.45 
Diluted Earnings Per Share $2.79 $2.45 
Basic Average Shares Outstanding 35,363,000 35,512,000 
Dilutive Average Shares Outstanding 35,414,000 35,517,000 
MAKE YOUR OPINION COUNT - Click Here 
http://tbutton.prnewswire.com/prn/11690X86138293

/CONTACT: Luis Diaz-Perez, 312-240-4567, or Mary Ann Wall, Investor 
Relations, 312-240-7534, both of Peoples Energy/ 07:00 EDT 
Report: Enron official given authority to end power project in India
By RAMOLA TALWAR BADAM
Associated Press Writer

04/27/2001
Associated Press Newswires 
Copyright 2001. The Associated Press. All Rights Reserved. 

BOMBAY, India (AP) - A top official of U.S. energy giant Enron Corp. was 
authorized to issue a termination notice to pull out of a controversial power 
project in western India, the largest foreign investment in the country, a 
newspaper reported Friday. 
The board of the Dabhol Power Company, the Indian subsidiary of Enron, met in 
London on Wednesday and authorized the company's managing director to issue a 
preliminary notice to terminate the project, billed as the world's largest 
natural gas fired power plant, The Times of India reported.
"The board has given powers to the management to issue the pre-termination 
notice. But the meeting unanimously felt the need of the hour was not to 
terminate the project but to initiate a re-negotiation process," Vinay 
Bansal, chairman of the Maharashtra State Electricity Board, was quoted as 
saying by the newspaper. 
Enron officials have refused comment. 
The notice is the first of three steps that could end in the abandonment of 
the dlrs 3 billion project. A six-month reconciliation period would follow 
any move by the Dabhol Power Company to issue the termination notice, Bansal 
said. 
Indian lenders, present at a meeting with foreign financial institutions in 
London earlier this week, have said they favor renegotiation. 
The project has been in trouble since December when the Maharashtra state 
government, where the Dabhol project is located, said the tariff was 
exorbitant and demanded a new price agreement. 
The state power utility said it could not pay Dabhol's monthly electricity 
dues, which prompted the company to invoke a federal guarantee in February. 
This was the first time in India that a federal guarantee was invoked. As 
part of the 1995 agreement between the company and the state government, the 
federal government has to pay in case of a state default. 
But before the federal government stepped in, the state government paid 
dlrs17 million in outstanding bills. Since then, the state power utility has 
confirmed that all pending bills have been paid. 
But a dispute over payment of dlrs 48 million for December and January bills 
is pending. 
Several political parties had earlier demanded the project be scrapped, since 
the costs had increased from 1.8 rupees (four cents) per unit agreed six 
years ago for electricity generated by the 740-megawatt naphtha plant, to 7 
rupees (15 cents). 
Enron has maintained that work will be completed by year-end on the 1,444 
megawatt liquified natural gas plant. 
Houston, Texas-based Enron has a 65 percent stake in Dabhol Power, and is the 
project's largest shareholder. Other shareholders include the Maharashtra 
State Electricity Board with 15 percent and General Electric Co. and Bechtel 
Enterprises with 10 percent each. 
(rtb, nnm, kgo)

State employees' retirement funds benefitting from power crisis

04/27/2001
Associated Press Newswires 
Copyright 2001. The Associated Press. All Rights Reserved. 

OAKLAND (AP) - Dozens of state legislators, more than a million state workers 
- and even Gov. Gray Davis may be indirectly profitting from California's 
power woes. Calpers, the state retirement and pension system, has more than a 
billion dollars invested in power generators. 
KTVU reports Calpers holds more than $250 million of Enron stock, almost $153 
million of Duke Energy, $90 million of El Paso Energy and $62 million in 
Reliant Energy.
The governor and other lawmakers have threatened to investigate power 
producers for gouging California consumers. Many energy producers have been 
reporting record profits during the power crisis. 
Jim Knox, of California Common Cause, said Calpers should look at divesting 
its stock if the companies are profiting at the expense of California 
consumers. 
"I assume their Enron and Reliant stock has done quite well in the last 
couple of years, but it has done well at the expense of California 
consumers," he said. 
But Pat Macht, a Calpers spokeswoman, says if Calpers were to divest of every 
stock that had a critic, it would be impossible to manage. 
Senator Don Perata (D-Oakland) agreed with Macht. 
"We have been through this before - and it is a very complicated thing," he 
said. "But for us to divest of all the energy stocks, I mean, we would be 
using candles." 
In the past, Calpers has divested from South African and tobacco stocks. 
Macht said the decision was a purely financial one and that Calpers is so 
large it has investments in every sector - not just energy. 
It is important to point out that there is no direct conflict of interest for 
the governor or for any legislature, KTVU reports. When they eventually 
retire, those officials' monthly payments from the state will be "doled out" 
according to a pre-set formula. 
(KTVU, San Francisco Bay Area)

DHABOL BOARD EMPOWERED TO END POWER CONTRACT WITH INDIAN STATE

04/27/2001
Asia Pulse 
(c) Copyright 2001 Asia Pulse PTE Ltd. 

LONDON, April 27 Asia Pulse - The management of Enron's Indian affiliate, the 
Dhabol Power Company, has been empowered by the board to sever the power 
supply agreeement with the Maharastra State Electricity Board, a move that 
could inflict a financial liability of about Rs 2.84 billion (US$6.06 
million) on the Indian government. 
A decision to authorise DPC President Neil McGregor to issue a termination 
notice to MSEB for sale of power was taken by the Board at its meeting here 
yesterday by a vote of six to one after Maharastra government representatives 
were prevented from voting on ground of 'interested party'.
Dubbed as 'unfortunate' by the Maharashtra Chief Minister, Vilasrao Deshmukh, 
the decision was the culmination of the bitter fight between the US energy 
giant Enron and the state government over price of power from the US$3 
billion project, the first one to get the federal government's counter 
guarantee. 
(PTI) 27-04 1940

NO ADVERSE FALLOUT TO COME FROM ENRON DECISION: INDIAN MINISTER

04/27/2001
Asia Pulse 
(c) Copyright 2001 Asia Pulse PTE Ltd. 

NEW DELHI, April 27 Asia Pulse - The Indian government wore a brave face on 
Thursday, following the Enron promoted Dhabhol Power Company (DPC) board's 
decision to empower management to terminate an agreement with the Maharashta 
State Electricity Board. 
Federal power minister Suresh Prabhu said there would not be any adverse 
effect on foreign investment within the country's power sector a a result of 
the decision.
Following an Economic Affairs meeting, Prabhu said "We are expecting 
cooperation from many Scandivian countries as well as European nations in the 
power sector." 
On Tuesday, the board of DPC, in which Enron has a 65 per cent stake, decided 
to take the step after a bitter feud with the state government over a payment 
issue. 
(PTI) 27-04 1803
India: Starving oneself to stuff others?

04/27/2001
Business Line (The Hindu) 
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire 

NEW DELHI, April 26. THE Food Corporation of India (FCI) has identified 10 
locations for creation of 20 lakh tonnes (l.t.) bulk storage capacity on 
build-own-operate (BOO) basis by the private sector. These include 
establishing godowns/silos of three l.t. capacity each in Nabha, Barnala and 
Moga in Punjab and Sirsa and Kaithal in Haryana and one l.t. each in Hooghly, 
Chennai, Coimbatore, Bangalore and Mumbai. 
Besides, FCI has invited 'expression of interest' for the construction of 
conventional godowns of 1,000 to 20,000 tonnes capacity each through the BOO 
route. In this case, it is proposed to build nearly six l.t. of aggregate 
capacity in around 80 locations all over the country.
Private parties investing in these facilities would store and maintain 
foodgrains procured by FCI, for which they will be paid storage costs. 
Under the National Policy on Handling, Storage and Transportation of 
Foodgrain, notified on July 4, 2000, FCI will 'guarantee' utilisation of 
these facilities up to 100 per cent for the first 10 years and 75 per cent 
for the next 10 years. 
Further, the 2001-02 Budget has granted a five-year tax holiday and 30 per 
cent deduction of profits for the next five years to "enterprises engaged in 
the integrated business of handling, transportation and storage of 
foodgrains." 
The policy also provides for deduction of 40 per cent of profits derived by 
institutions financing these projects - prompting the likes of ICICI and IDFC 
to enter the fray and offer their advisory and funding 'expertise' in the 
area. 
The move to involve the private sector in the creation as well as operation 
of storage facilities on FCI's behalf has been defended mainly on two counts. 
Firstly, it would tackle the Government's spiralling food subsidy problem 
through reduction in grain handling and operating costs - something that FCI 
cannot achieve on its own. 
Secondly, there is a massive dearth of storage capacity with Government 
agencies, which neither have the resources to make fresh investments. 
To address the first point, one needs to consider the real cost dimensions 
involved. Conservative estimates are that private investors would incur a 
cost of roughly Rs 15,000 per tonne for constructing bulk silos. Thus, 
creation of 20 l.t. storage capacity entails investments of Rs 3,000 crore. 
Assuming a 1:1 debt-equity ratio, the annual interest outgo on investment 
would come to at least Rs 1,000 per tonne. The investor also has to spend on 
labour, fumigation, storage, interest on grain, turnover of stocks, etc., - 
all of which adds to another Rs 1,500 per tonne. 
Besides, annual maintenance costs are reckoned at about Rs 500 per tonne. 
If over and above this, investors are to be given a 'decent' 15 per cent 
return on equity, FCI would have to fork out nothing less than Rs 4,000 per 
tonne for sub-contracting its storage operations to private parties. And on 
20 l.t. capacity, the annual outgo works out to about Rs 800 crore. 
Compare this to FCI's own current annual 'carrying cost' of Rs 2,300 per 
tonne for its grains. In 2000-01, FCI held about 200 l.t. of buffer stocks 
over and above the normative requirement, on which it incurred carrying costs 
(interest plus storage) of nearly Rs 5,000 crore. In the proposed regime, it 
would end up coughing over one-sixth of these sums for a tenth of the 
capacity! 
That raises the issue of inadequate storage capacity with Government 
agencies. According to the Ministry of Consumer Affairs and Public 
Distribution's latest Annual Report, storage capacity with FCI as on December 
31, 2000 stood at 30.06 million tonnes, of which covered godowns accounted 
for 22.70 m.t. and CAP (Cover and Plinth) 7.36 m.t.. 
The Central Warehousing Corporation (CWC) had eight m.t. capacity, of which 
covered godowns comprised seven m.t.. The aggregate storage capacity of CWC's 
16 associate State Warehousing Corporations came to another 14 m.t., 
including 13 m.t. of covered godowns. 
If one adds to this the estimated 17 m.t. of capacities available with State 
Governments, the public sector has almost 70 m.t. of storage capacity, which 
is more than sufficient to cater to the existing 46 m.t. of foodgrain stocks 
in the Central pool. And contrary to general belief, the proportion of crude 
CAP structures, which are ostensibly vulnerable to rodent attack and moisture 
ingress, is hardly 20 per cent. 
That the pronouncements of public godowns bursting at their seams are 
somewhat exaggerated is also borne by the fact that CWC godowns today operate 
at around 80 per cent of their capacity. On the other hand, the Government is 
committed to ensuring 100 per cent capacity utilisation for bulk storage 
capacity built by private agencies, including leading grain handling entities 
from Australia and Canada. 
Whether this would lead to a 'mini-Enron' situation - remains to be seen. 
Harish Damodaran

HEADING
The Times of India News Service

04/27/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

Crucial meeting of DF allies on Enron issue postponed 
Mr Deshmukh is heading the group demanding a judicial inquiry into the first 
and second phases of the Enron power project. He is supported by the Peasants 
and Workers Party, the Janata Dal (secular), the Samajwadi Party and the CPM.
This group of smaller parties of the Democratic Front have already told chief 
minister Vilasrao Deshmukh that they would reconsider their support to the 
ruling front unless a judicial probe is ordered on the lines of Srikrishna 
Commission. Mr Deshmmukh has requested the group not to take any hasty 
decision. 
Prof Gopal Dukhande, spokesperson of the Janata Dal (secular) told this 
newspaper that the group had not given up its main demand to order a judicial 
probe into the way the Power Purchase Agreements (PPAs) were singed with 
Enron. He said the group would meet on May 2 to take into considerations all 
the developments taking place regarding the Enron power project. The official 
coordination committee of the DF government is also scheduled to meet at the 
state guest house, Sahyadri, on the same day. 
N.D. Patil of the PWP, who is the convener of the DF coordination committee, 
is also opposed to renegotiations and wants the government to appoint an 
inquiry commission. 
``We are opposed to the way the PPAs were signed with Enron ignoring the 
interests of the state. The inquiry commission will bring out the truth,'' a 
senior minister said. 
``Even if Enron now wants to withdraw from the project, we should not let it 
go without investigating the matter,'' he added. 
Meanwhile union finance minister Yashwant Sinha has agreed to depute a 
high-level representative of the Union government to represent finance, 
power, petroleum, and other union government agencies on the renegotiation 
team. These departments will set up their own internal coordination committee 
to review the situation from time to time and guide the renegotiation team to 
be set up by the Maharashtra government.

Success of state bandh isolates BJP

04/27/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

MUMBAI: The state unit of the Bharatiya Janata Party (BJP) finds itself 
politically isolated following the Maharashtra bandh on Wednesday. The 
protest was jointly organised by the Shiv Sena, an ally of the BJP, the left 
parties and several trade union organisations. Even a section of the Congress 
backed the bandh. 
The bandh was specifically targeted at the BJP, which heads the National 
Democratic Alliance (NDA) at the Centre. Even though the Sena is a part of 
the NDA, it seems to have cleverly sensed the mood of the people, which is 
clearly against the economic policies of the Centre, and joined hands with 
the left and democratic parties to organise the bandh.
A BJP office-bearer said, ``The Sena finds the ground slipping from under its 
feet, and hence it is indulging in gimmicks like sponsoring bandhs.'' 
However, Sena leader Uddhav Thackeray said, ``We have, unambiguously, 
demonstrated that we are on the side of the workers, farmers and the middle 
class. We have prioritised our commitments and our first priority is to the 
people and not to cabinet berths.'' 
Sources in the Sena said the party does not want to be punished by the people 
during elections for the blunders made by the BJP. ``The deleterious effects 
of globalisation are there for everyone to see. Thousands of looms have 
fallen silent because of textile imports; apples and chocolates from New 
Zealand and Switzerland and toys, chemicals and dyes from China and Taiwan 
are edging out Indian products in local markets. Not only workers, even 
middle-class employees are being fired by their employers. Are we to mutely 
watch the crushing of thousands of families under the wheels of the 
globalisation juggernaut,'' asked a Sena leader. 
Interestingly, many in the BJP concur with this viewpoint, but are afraid to 
speak out lest they are accused of violating the party discipline. In 
private, BJP activists are extremely critical of the Vajpayee government's 
``non-response'' to the torture and killing of 16 jawans of the Border 
Security Force by Bangladesh Rifles. 
``Our foreign minister Jaswant Singh personally escorts top Pakistani 
terrorist Maulana Masood Azhar from a jail to Afghanistan and sets him free. 
Mr Vajpayee, unilaterally, declares a ceasefire in Kashmir. And, now he does 
nothing when our jawans are killed by a small nation like Bangladesh,'' a 
senior BJP leader observed. Senior leader of the Vishwa Hindu Parishad (VHP) 
Ashok Singhal, who was in the city recently, openly stated that the Vajpayee 
government has come to a standstill. However, party spokesperson Atul 
Bhatkhalkar said, ``We do not want to do anything that will complicate the 
situation for Bangladeshi prime minister Hasina Wajed, who is pro-India. 
People should appreciate the ground realities.'' 
Meanwhile, the Enron issue is likely to emerge as a test of the recent unity 
between the Sena and parties of the left. The controversial power project of 
the U.S. MNC was endorsed by the Sena when it, along with the BJP, was in 
power in the state. But the left parties want the project to be scrapped. 
Sena chief Bal Thackeray has gone on record stating that his government was 
under pressure from the U.S. to sign the accord with Enron. With Enron in a 
confrontationist mode vis-a-vis the state and Central governments, the Sena's 
response is being keenly watched in political circles here.

Additional power for Delhi promises Prabhu
A Staff Reporter

04/27/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

NEW DELHI: Union power minister Suresh Prabhu on Thursday assured chief 
minister Sheila Dikshit that the Capital would be provided an additional 150 
MW of electricity starting first week of May. 
Dikshit met Prabhu to apprise him of the power situation in the Capital. She 
told Prabhu that the city was facing a power deficit of about 300 MW and 
desperately needed an additional supply to meet the increasing demand.
The Centre promised that the additional power would be made available from 
the Eastern Grid. Dikshit told Prabhu that the Delhi government was 
negotiating with the Chhatisgarh government to buy 100 MW. She said the Delhi 
government was facing severe problem in getting power from Himachal Pradesh 
Electricity Board due to reduction in the power generation in the state. 
The government is now contemplating talks with West Bengal to purchase power. 
Dikshit said her government was negotiating a deal with Enron, but was 
reluctant to buy electricity due to the high tariff quoted by the company. 
Dikshit said additional power was also expected from the three units at 
Dadri, Badarpur and Raj Ghat power stations which would be become functional 
by May 10. 
Besides Dikshit, Delhi power minister Narendra Nath and principal secretary 
power Ashok Pradhan and Delhi Vidyut Board chairman Jagdish Sagar were also 
present.

Enron ready to pull out, but lenders say wait
Business Times Bureau

04/27/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

MUMBAI: The Dabhol Power Company board, which met on Wednesday in London, 
authorised the company management to issue a termination notice to the 
Maharashtra State Electricity Board. The company, however, may not pull out 
of the project yet, considering its lenders, who met on Monday, opposed such 
a move and favoured renegotiations. 
Sources present during both the meetings said that though foreign lenders 
supported Enron on the termination issue, domestic financial institutions, 
led by the Industrial Development Bank of India, prevailed over the 
deliberations to oppose any such drastic move. Enron needs the lenders' 
consent to file a pre-termination notice for pulling out from the project.
The decision to empower DPC chief Wade Cline to issue a termination notice 
was taken with six votes in favour against a single IDBI vote against such a 
move. 
Another significant development during the entire proceedings was that the 
financial institutions made it clear that further funding of Phase II of the 
project will depend on the Government of India assuring payment mechanisms. 
Institutions are yet to disburse about 30 per cent of the sanctioned package, 
which is crucial for completing the Phase II expansion project. 
``The board has given powers to Wade Cline to issue a pre-termination notice. 
But the meeting quite unanimously felt the need of the hour is not to 
terminate the project but to initiate serious re-negotiation proceedings,'' 
said MSEB Chairman Vinay Bansal, who attended the board meeting. ``MSEB 
presented their views to the board members and it was understood by Enron 
which also included the Rs 401 crore penalty issue which is heading for 
arbitration proceedings. ``We have also made it clear that the tariff 
structure of Enron is quite high and a downward revision of tariffs is 
unavoidable," Bansal added. 
``They cannot issue a termination notice without our consent since our 
exposure in the project is quite large and the lenders should approve any 
plans in that direction,'' said a top banker who was present during the 
lenders' meet. ``There is a general consensus that the project must be 
completed and the proposal to terminate the PPA should be kept in abeyance,'' 
he added. The global arrangers for the DPC include ANZ Investment Bank, 
Credit Suisse First Boston, ABN-AMRO, Citibank and the State Bank of India, 
where all these parties conducted separate meetings with the company 
officials. However, some bankers said the company can file a termination 
notice even if one lender with a minimum 5 per cent exposure on the project 
favours such proceedings. 
Meanwhile, in a clear reversal of roles, Maharashtra Chief Minister Vilasrao 
Deshmukh said that the state government was not keen on terminating the PPA. 
``We will ask them to refrain from taking any such harsh steps since that 
would be bad news for all of us, including DPC,'' Deshmukh said. Deshmukh was 
echoing Union Power Minister Suresh Prabhu's sentiments, who said that the 
government wanted an amicable settlement of the payment row. He, however, 
added that termination of the project would not hurt foreign investments, and 
dismissed warnings by analysts that winding up the $2.9 billion project would 
be a blow to India's efforts to woo foreign investors. 
The DPC has already slapped one conciliation notice on the Centre and three 
arbitration notices on the state government over non-payment of dues 
amounting to Rs 213 crore and interest towards the bills due for December 
2000 and January 2001. 
Meanwhile, MSEB officials said in Mumbai that the March bills amounting to Rs 
134 crore was paid on Thursday as protest payment, despite the dispute over 
the amount. 
When asked on the future course of action, Bansal said it was up to the DPC. 
The Enron issue was also raised in the Lok Sabha on Thursday, when Prabhu 
said that scrapping of the agreement would cost Rs 2,840 crore to the Centre, 
whose liability in the project agreement was limited. Centre's liability in 
case of termination is one year's electricity bill and a termination fee of 
$300 million, he said.

India's single largest foreign investor threatens to pull out
Madhu Nainan

04/27/2001
Agence France-Presse 
(Copyright 2001) 

BOMBAY, April 27 (AFP) - The biggest single foreign investor in India, 
US-based Enron Power Corp., is threatening to pack its bags in frustration -- 
a move that would cast doubts over the country's investment-friendly 
credentials 
Enron's Indian subsidiary Dabhol Power Co. (DPC) is putting up a 
2.9-billion-dollar power station in India's industrial heartland Maharashtra 
state.
At a meeting in London on Wednesday, the DPC board of directors authorised 
chief executive officer Neil McGregor and Enron India chief K. Wade Cline to 
serve a "preliminary" termination notice for sale of power, within the next 
four weeks, to the Maharashtra electricity board. 
The two-part power station is being erected at the port town of Dabhol, some 
200 kilometres south of the state capital Bombay. Payments for electricity 
have been guaranteed by the state and federal governments. 
Part one began generating power in May 1999, but the project has been mired 
in controversy and acrimony, with the state government arguing it could not 
afford the high electricity bills. 
"This is a drastic and unfortunate decision the board of directors has taken, 
even though we made it clear that we want to find a solution to the impasse," 
Maharashtra energy minister Padamsinh Patil told AFP. 
Patil said a decision had been taken by the state and federal governments 
last week to set up a panel to renegotiate the power purchase agreement. 
"Enron knew about the decision. We have no animosity towards Enron. We have 
paid the February bill under duress and we told them we are ready to pay the 
other bills also under protest." 
Vijay Kalantri, president of the All India Association of Industries 
described the Enron move as "unbusinesslike". 
"They have done this to build up the pressure on the state and federal 
governments. Economic disputes are not resolved by threats, but by sitting 
down to discuss and re-negotiate contracts." 
Kalantri agreed that if Enron carried out its threat, the consequences would 
be "bad" for all parties. 
Ashok Khinvasara, director at the Ispat group, said India could suffer as a 
foreign investment destination, especially in the power sector. 
The Ispat group's plans to put up a 1.4 billion-dollar power project in 
Maharashtra have been put on hold in the wake of the Enron controversy. 
"Since the state electricity board is not paying its dues, Enron is within 
its rights to serve a termination notice," Khinvasara said. 
"The board will not be hit initially as it buys very little power from DPC 
now, but the size of Enron's claims and the speed with which it sets in 
motion a recovery process could turn out to be worrisome. Enron's claims 
could be more than 30 billion rupees (652 million dollars)." 
Khinvasara said the Enron episode showed that future investors should take 
care to see that tariffs are "affordable" and should not take comfort merely 
in contracts and government guarantees. 
The DPC board of directors' decision is the second in a series of moves to 
increase the pressure on the government. 
Early in April DPC served the state electricity board a notice of political 
"force majeure" which is a legal manoeuvre that enables a party to break a 
contract in the case of events beyond its control. 
The Dabhol project has had a turbulent ride ever since it was signed in 1992. 
Allegations of corruption and high costs led to the scrapping of the contract 
in 1995, but it was re-negotiated the same year. 
In February a state government panel recommended fresh re- negotiations to 
bring down the tariffs and charged Enron with inflating costs. 
man/gh/lh

Business/Financial Desk; Section C
COMPANY NEWS
INDIAN UTILITY PAYS $28 MILLION MARCH BILL TO ENRON
Reuters

04/27/2001
The New York Times 
Page 4, Column 1
c. 2001 New York Times Company 

The Maharashtra State Electricity Board in India paid its March power bill to 
the Enron Corporation yesterday, a day after Enron said it might stop selling 
power to the utility. The utility gave Enron's 65-percent-owned Dabhol Power 
Company 1.34 billion rupees ($28.6 million) for electricity it bought last 
month, a utility official said. But the utility still owes the company 2.26 
billion rupees for power purchases in December and January. It has refused to 
pay, saying Dabhol should adjust that amount with the penalty of 4 billion 
rupees it has levied on the company for what it says was a failure to meet 
capacity targets.
Business
DAILY BRIEFING
STAFF REPORTS AND NEWS SERVICES

04/27/2001
The Atlanta Constitution 
Home
C.2
(Copyright, The Atlanta Journal and Constitution - 2001) 

> Denotes item of particular local interest. 
UTILITIES/ENERGY: Enron, Sierra Pacific cancel Portland deal 
Houston --- Enron Corp.'s $3.1 billion sale of Portland General Electric Co. 
to Sierra Pacific Resources was canceled by mutual agreement, the companies 
said. Enron said last month that the sale probably wouldn't be completed 
because of California's energy crisis. 
Business Brief -- Enron Corp.: Sale of Utility Subsidiary To Sierra Pacific 
Is Canceled

04/27/2001
The Wall Street Journal 
B8
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

HOUSTON -- Enron Corp. and Sierra Pacific Resources said they ended their $2 
billion agreement for Sierra, of Reno, Nev., to buy Enron's electric utility 
subsidiary, Portland General Electric. The collapse of the pact was expected 
after Jeffrey K. Skilling, Enron's president and chief executive, said last 
month the sale wasn't likely to go through. "As we have discussed in the past 
few weeks, the energy markets in California and Nevada have led to a 
regulatory and legislative environment that has made this transaction 
increasingly difficult to complete," said Mr. Skilling in a news release.
International News
Indian State to Pay Enron for March Supply
Associated Press

04/27/2001
The Asian Wall Street Journal 
7
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

BOMBAY -- The Maharashtra state power utility will pay outstanding 
electricity bills for March as part of a dispute over tariffs with U.S. power 
company Enron Corp. 
"We will make the payment of 1.34 billion rupees ($28.7 million) today for 
the March bill. The February bill of 1.1 billion rupees was already paid up 
last month," Krishna Rao, a member of the Maharashtra State Electricity 
Board, said on Thursday. "As far as we are concerned, there are no more 
payments outstanding."






Colombia Suspends Isagen Sale Pending Court Ruling, Papers Say
2001-04-27 09:47 (New York)


     Bogota, April 27 (Bloomberg) -- Colombia suspended its sale
of state electric generator Isagen until a high court can rule on
An injunction request filed by Empresas Publicas de Medellin, the
country's largest municipal utility, newspapers said.
     Finance Minister Juan Manuel Santos said the sale of Isagen,
the No. 3 power generator, was suspended on the order of a
Medellin court, pending a ruling by the Council of State, a high
court that oversees state entities, the daily El Tiempo said.
     Santos said the decision wouldn't affect government financing
plans for this year because it has lined up most of its financing,
La Republica said. The government said it wanted to raise $450
million from the sale, which has repeatedly been postponed since
1999 due to limited investor interest stemming from guerrilla
attacks on the power grid and legal wrangling.
     The government planned to sell the company this month, La
Republica said. The Council of State in September ruled in favor
of an energy regulator measure that barred EPM, as the Medellin
utility is known, from taking a majority stake in Isagen, clearing
the way for the sale to go ahead.

(4/27; Tiempo; Sec. 1; P. 10; {TMPO <GO>})
(    ; Republica; Sec. 1; P. 2 {LRPB <MGO>})


--Robert Willis in Bogota (571) 317-4000 bwillis@bloomberg.net,
through the New York newsroom (212) 318-2300 /rhj

Story illustration: For news on employment in Colombia, enter
{COUETOTL <Index> CN <GO>}.