-----Original Message-----
From: 	Kohli, Sandeep  
Sent:	Monday, July 09, 2001 8:31 AM
To:	Kaminski, Vince J
Subject:	FW: From The Enron India Newsdesk - July 7-9th newsclips

Vince,

This makes interesting reading.

Regards,
Sandeep.

 -----Original Message-----
From: 	Varma, Nikita  
Sent:	Monday, July 09, 2001 5:46 AM
To:	Varma, Nikita
Subject:	From The Enron India Newsdesk - July 7-9th newsclips

THE ECONOMIC TIMES
Monday, July 09, 2001, http://www.economictimes.com/today/09econ07.htm
Enron chairman coming today, Girish Kuber 
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BUSINESS STANDARD
Monday, July 09, 2001, http://www.business-standard.com/today/news.asp?Menu=67#4
Enron brass positive on resolving dispute, chairman to meet FM today 
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THE FINANCIAL EXPRESS
Monday, July 09, 2001, http://www.financialexpress.com/fe20010709/news2.html
Enron chairman to hold talks with Vajpayee, Sinha, Prabhu Sanjay Jog

The above article was also reported in the following newspaper:

THE TIMES OFINDIA
Monday, July 09, 2001, http://www.timesofindia.com/today/09busu6.htm
Enron chief to discuss Dabhol with Prabhu 
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THE TIMES OF INDIA
Monday, July 09, 2001, http://www.timesofindia.com/today/09busu7.htm
Enron India chief optimistic about Dabhol 
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THE ECONOMIC TIMES
Monday, July 09, 2001, http://216.34.146.167:8000/servlet/Form
Judicial probe sought into Enron imbroglio
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THE TIMES OF INDIA
Monday, July 09, 2001, http://www.timesofindia.com/080701/08busi8.htm
BJP favours judicial probe into Enron controversy 
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THE ECONOMIC TIMES
Monday, July 09, 2001, http://www.economictimes.com/today/09infr03.htm
Privatise MSEB generation, distribution: Panel

The above article was also reported in the following newspapers:

BUSINESS STANDARD
Monday, July 09, 2001, http://www.business-standard.com/today/economy7.asp?Menu=3
MSEB should be privatised, says Godbole panel
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THE TIMES OF INDIA
Monday, July 09, 2001, http://www.timesofindia.com/today/09busi5.htm
Godbole panel recommends privatisation of MSEB 
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MID DAY, 
Monday, July 09, 2001, http://www.chalomumbai.com/asp/article.asp?cat_id=29&art_id=12941&cat_code=2F574841545F535F4F4E5F4D554D4241492F5441415A415F4B4841424152
Dabhol employees sure company will pull out, Deepak Lokhande
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MID DAY
Sunday, July 08, 2001, 1http://www.chalomumbai.com/asp/article.asp?cat_id=29&cat_code=2f574841545f535f4f4e5f4d554d4241492f5441415a415f4b4841424152&art_id=12925
Villages suffer with Enron shutting shop
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THE ECONOMIC TIMES, Monday, July 09, 2001
Enron chairman coming today, Girish Kuber 
 
THERE would be renewed efforts to resolve the Dabhol dispute with Kenneth Lay, the high profile chairman of Enron Corp, arriving in Delhi tomorrow. Mr Lay is scheduled to meet Prime Minister Atal Bihari Vajapayee and finance minister Yashwant Sinha, besides power minister Suresh Prabhu. He will discuss the fate of Dabhol Power Company which is locked in a dispute with the MSEB. According to central government sources Mr Lay will take up the issue with none other than the Prime Minister and finance minister during his stay in Delhi. His itinerary remains a closely guarded secret with Enron officials unwilling to share any information on the issue. However, according to government sources Mr Lay's office had got in touch with the PMO to confirm the meeting. Mr Lay, flying in his Gulf Stream, would be reaching Delhi tomorrow. He is coming to India at a time when around six states have shown interest in buying the Enron power. However, these states are interested only if Enron makes it available at around Rs 2.50 per unit - which is unacceptable to the company. 
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BUSINESS STANDARD, Monday, July 09, 2001
Enron brass positive on resolving dispute, chairman to meet FM today 

Wade Cline, chief executive of the Indian operations of Enron Corp, said today in New Delhi that he was optimistic about working through the payment dispute with MSEB."There are a variety of options, and we are trying to work out solutions," he said after a meeting with the finance secretary."We are having good meetings with the ministry. So, we are optimistic," Cline said. He added he had briefed the finance secretary ahead of the meeting of Kenneth Lay, chairman of Enron, with finance minister Yashwant Sinha. Lay is also due to meet power minister Suresh Prabhu and other senior officials today in connection with the payment dispute between Enron's Dabhol Power Company and MSEB.
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THE FINANCIAL EXPRESS, Monday, July 09, 2001
Enron chairman to hold talks with Vajpayee, Sinha, Prabhu Sanjay Jog

The Enron chairman Kenneth Lay, during his closely-guarded India visit, will hold talks with the Prime Minister AB Vajpayee, the Union Finance Minister Yashwant Sinha, Union Minister for Power Suresh Prabhu and some of the upcountry contacts. Mr Lay, during his short visit commencing from late Sunday night, may also hold talks with the Congress president Sonia Gandhi and various political and business leaders in New Delhi. Informed sources told The Financial Express that efforts are on to organise a meeting with the Maharashtra chief minister Vilasrao Deshmukh and his colleagues in the ministry.The Dabhol Power Company (DPC) declined to give details about Mr Lay's visit. "We don't want to comment," said its spokesman Jimmy Mogal. Mr Lay's visit deserves special significance, especially when the Maharashtra State Electricity Board (MSEB) has stopped power purchase from DPC since May 29, after issuing a notice to rescind its power purchase agreement with DPC. MSEB has also got shot in the arm when the Mumbai high court dismissed a writ petition filed by the DPC challenging the jurisdiction of Maharashtra Electricity Regulatory Commission to adjudicate upon its dispute and difference with MSEB.

Mr Lay, who alongwith DPC's former chief executive officer Rebecca Mark had convinced the necessity for survival of Dabhol project to the previous Shiv Sena-BJP government in 1996 and 1998, may have to make similar efforts again. Mr Lay in early May had made it clear that "India can illafford the very public fight the Dabhol has become. It sends a bad signal to the rest of the world as to the difficulties of investors in India, which is not what India needs right now." Mr Lay further said that "India needs a lot of foreign investment if the country expects to build up its infrastructure." However, Mr Sinha had contested Mr Lay's claim and said that "there is no need for us to think that because there is a problem with Enron, it is necessarily going to act as a dampner to foreign direct investment.Mr Lay's visit is also crucial, especially when the the Congress president Sonia Gandhi during here recent US visit has assured the American leadership that the Congress-led government in Maharashtra will make every effort to amicably resolve the Enron controversy. The former union finance minister Dr Manmohan Singh, who was accompanying the Congress president, had told the US leadership that the effort now is to find an amicable and mutually satisfactory solution based on purely economic and business considerations.

Meanwhile, DPC has relaunched an advertisement campaign entitled " why do I then write to you today?" coinciding Mr Lay's visit. However, the anti-Enron lobby is quite amused to see the ad campaign as it alleged that the DPC is misleading the people. According to a senior leader of anti-Enron movement, it clearly shows that Enron had minted money during its operation since may 1999 and it has funds to spend on ad campaign, especially when the power generation has been closed since May 29. The anti-Enron lobby is expected to press for the judicial probe against Dabhol deal at the coordination committee meeting of the constituents of the ruling Democratic Front scheduled for July 11. 
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THE TIMES OF INDIA, Monday, July 09, 2001
Enron India chief optimistic about Dabhol 

The chief executive of Enron Corp's Indian arm said on Monday he was optimistic about working through the company's payment dispute with a local utility. "There are a variety of options facing us with the project. We are just trying to work through those," Wade Cline told reporters in the Indian capital after a meeting with the finance secretary. "We are having good meetings with the ministry, so we are optimistic," Cline said. He added he had briefed the finance secretary ahead of Enron Corp Chairman Kenneth Lay's meeting with Finance Minister Yashwant Sinha. Lay is due to meet Sinha, the power minister and senior officials in connection with the payment dispute between Enron's Dabhol Power Co and the Maharashtra State Electricity Board which has defaulted on payments of $48 million to Dabhol. Enron's project is the largest direct foreign investment in India. Its first phase of 740 MW was completed in 1998, while a second phase adding another 1,444 MW was almost complete when its contractor stopped work because of the dispute. (Reuters)
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THE ECONOMIC TIMES, Monday, July 09, 2001
Judicial probe sought into Enron imbroglio
 
THE STATE executive of the BJP in Maharashtra on Saturday passed a resolution favouring a judicial probe into all aspects of the 'controversial' agreement signed between the state government and the US energy major Enron. The resolution is perceived by political analysts as a move aimed at forcing the DF government to agree to a judicial probe into the Enron issue even though the ruling DF coordinating committee had earlier deferred a decision on the question to July 11. At a closed door meeting held at Dombivali in Thane district on Saturday, the BJP state executive stated that "it had nothing to hide and is in favour of a judicial probe." The resolution also lambasted the DF government for 'playing politics' and "trying to settle scores with the NCP chief Sharad Pawar," according to BJP spokesman B Atul. "If there is a demand for a judicial enquiry into the Enron issue, the BJP is not opposed to it," he said. The change in the BJP's stand on the Enron issue at this juncture is significant as the BJP national vice president Gopinath Munde had earlier opposed a judicial probe in the matter. 

Coming down heavily on the ruling DF government for raking up old issues and pressing for reversal of the names of Sambhaji Nagar and Dharashiv to their original names, Atul alleged "the government is practising revengeful politics." Flaying the DF government for adopting a communal overtone, the resolution further stated that the state government's attitude is aimed at disturbing the social harmony of the state. The BJP's changed stand on contesting the local self-governing bodies election also figured at the meeting which passed a resolution calling for an alliance with the Shiv Sena during the zilla parishad and civic elections, deviating from its earlier stand of '100 per cent bjp', Atul said. Around 300 party workers, including BJP leaders, Gopinath Munde, Union ministers Ram Naik, Pramod Mahajan and Jaywantiben Mehta were among those who attended the meeting, presided over by the state BJP president, Pandurang Phundkar. The meeting will conclude on Sunday, Atul added. (PTI) 
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THE TIMES OF INDIA, Monday, July 09, 2001
BJP favours judicial probe into Enron controversy 

The state executive of the BJP in Maharashtra on Saturday passed a resolution favouring a judicial probe into all aspects of the controversial agreement signed between the state government and the US energy major Enron. The resolution is perceived by political analysts as a move aimed at forcing the DF government to agree to a judicial probe into the Enron issue even though the ruling DF coordinating committee had earlier deferred a decision on the question to July 11. At a closed door meeting held at Dombivali in Thane district on Saturday, the BJP state executive stated that "it had nothing to hide and is in favour of a judicial probe." The resolution also lambasted the DF government for 'playing politics' and 'trying to settle scores with the NCP chief Sharad Pawar,' according to BJP spokesman B Atul. 
"If there is a demand for a judicial enquiry into the Enron issue, the BJP is not opposed to it," he said. The change in the BJP's stand on the Enron issue at this juncture is significant as the BJP national vice president Gopinath Munde had earlier opposed a judicial probe in the matter. Coming down heavily on the ruling DF government for raking up old issues and pressing for reversal of the names of Sambhaji Nagar and Dharashiv to their original names, Atul alleged, "the government is practising revengeful politics." Flaying the DF government for adopting a communal overtone, the resolution further stated that the state government's attitude is aimed at disturbing the social harmony of the state. 

The BJP's changed stand on contesting the local self governing bodies election also figured at the meeting which passed a resolution calling for an alliance with the Shiv Sena during the zilla parishad and civic elections, deviating from its earlier stand of shatpratishat bha ja pa (100 per cent BJP), Atul said. Around 300 party workers, including BJP leaders, Gopinath Munde, union ministers Ram Naik, Pramod Mahajan and Jaywantiben Mehta were among those who attended the meeting, presided over by the state BJP president, Pandurang Phundkar. The meeting will conclude on Sunday, Atul added. (PTI) 
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THE ECONOMIC TIMES, Monday, July 09, 2001
Privatise MSEB generation, distribution: Panel
 
EVEN as Maharashtra grapples over its energy crisis with US energy major Enron, Godbole Review Committee has recommended outright privatisation of the loss-making state electricity board's distribution network and generation unit in the second part of its report to be submitted on July 11. "The report outlines path breaking reforms, which not only suggests restructuring of MSEB, but also makes its clear that its once-a-very-good board will be destroyed, if it continues as a government body", official sources said here on Sunday. The report would be submitted to the state chief minister Vilasrao Deshmukh on Tuesday morning, sources said. "The committee has recommended that MSEB's government ownership should be dissolved, however, the control of transmission network should rest with it". "MSEB's current assets are close to worth Rs 12,000 crore and once Cabinet approves the proposal following submission of the report, process like inviting tenders from private parties may be taken up", officials said. 

According to the report, the interested companies would have to infuse capital investment in the distribution and generation networks with an increased rate of return at about 4.8 per cent, sources explained. The 200-plus pages report draws a detailed road map for the need to privatise MSEB, a different model from what was implemented in other states, sources added. The sources said experiences of Orissa, Haryana, Karnataka and Andhra Pradesh were closely studied by the panel and then it decided to recommend this model of privatisation. "The mantra of privatisation of only distribution network has failed all over the country", official sources said. The report has emphasised on creating distribution network zones in the state's urban and rural areas respectively, bids for which could be invited for, they said. "The rural zones are very crucial for us", sources said adding, "the report recommends that these should be handed over to any private party, be it a co-operative like the Pravara Electricity or a non-governmental organisation with a clear cut subsidy payout". The committee has also worked out a subsidy model, which would intersperse with a special "transmisssion charge" levied by the state government after privatisation to the companies, official sources said. "The report suggests that the transmission company should levy a surcharge over an above the billing chargs, which would be used for recovering the cross-subsidies", the sources said. The aim to privatise only distribution and generation is to facilitate pure trade of power and avoid any kind of other interferences, mainly political, the sources added. (PTI) 
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MID DAY, Monday, July 09, 2001, 
Dabhol employees sure company will pull out, Deepak Lokhande

When Enron Chief Executive Officer Kenneth Lay arrives in India today to try to renegotiate the Dabhol power project, he will find that his employees are certain the company will pull out of the venture. " Everyday the government adopts a new stance. We have been given an indication that the company will pull out," said a senior officer working with Dabhol Power Company (DPC), Enron' s Indian subsidiary. " When the company was ready to renegotiate, the state government was adamant that it wouldn't hold any discussions. Now, when they are pressing for renegotiations and a reduction in tariff, the company is not willing. Lay will meet Prime Minister Atal Behari Vajpayee and apprise him of the state government' s changing stands," he said. The atmosphere at the Veldoor plant near Dabhol is one of gloom. Recently, several thousand workers were laid off when the plant was forced to shut down because the Maharashtra State Electricity Board (MSEB) refused to purchase electricity. MSEB claimed that DPC did not fulfil conditions of the Power Purchase Agreement (PPA). " There used to be 10,000 labourers working at the plant, either on the construction of the second phase, which is 90 per cent complete, or for the first phase generating electricity. Today, the plant looks like a smashaan (cemetery). Workers keep asking each other who is the next to go. It is sad," he said.Till recently, the main gate of the plant would be thronged by daily wage workers. Today, there are hardly any. Even those having permanent jobs with DPC are not sure if their jobs are safe. Stories of how even senior officers were shown the door in an unceremonious manner are making the rounds. " The other day a very senior officer was told that he was not required any more. By the time he reached his residence provided by the company, his phone lines were cut. He had to go out and phone relatives and friends. He was asked to collect his dues the next day. On arriving at the gate, he was in for another shock. He was asked to get himself a visitor' s pass with restricted access. It was shocking," said a contractor.
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MID DAY, Sunday, July 08, 2001
Villages suffer with Enron shutting shop

Enron is going back, and going back with it are the riches it brought to Guhagar and Dabhol talukas. Most hit are traders at Shringartali (Tali), a market that is 10 km away from Veldoor, where Enron built its 2000 plus mw thermal power plant. The crash here has been more severe than the dotcom crash as business volumes have reduced by more than 1000 per cent and the real-estate market has hit rock bottom.Says Uday Deolekar, who owns a building material shop at Tali, "It used to be Diwali time while the project was on. On Sundays, the four-lane road would throb with buyers." The party was over, however, with the state Government pulling the plug on Enron. Gloom took over as workers started leaving the project site around February. There has been little business activity since then.Deolekar used to run a small shop of pan-beedi and groceries till about eight years ago when Enron came to Dabhol. Construction activity picked up in the area and Deolekar, with his brother-in-law Mohan Sansare, seized the opportunity and started supplying building material. Business flourished and the Sansares took over a plot of land to open four more shops. Sitting at one of them, Deolekar is waiting for customers today."Villagers in Tali and nearby areas wanted to refurbish their houses to accommodate paying guests coming in hordes. There was great demand for accommodation and hardly any supply. While blue-collar workers were happy with dormitory-type arrangements, white-collar officials wanted one-room, kitchen, attached bath type apartments. Many villagers started constructing lodges and boarding houses to cater to demand. Little did they realise that the party would have come to an end in any case once the construction was over," says Deolekar.

However, his brother-in-law Mohan is happy that Enron is going back. "They were quite arrogant. They may have brought money to this area, but they also brought all the vices - booze, gambling and what not. Enron will go back, cash flow will dry up but these vices will now remain with us forever," he says. He wants an Indian company to take over the plant and run it. Naseemshet, owner of Kasam Mohammed Memon shop, is one of the biggest traders in Tali. "I used to work for the Bharatiya Janata Party (BJP). When Enron officers came here in 1994, they stayed in my guesthouses. I was pressurised by the party then to break off my ties with them, but I told myself I must keep politics out of business. I am happy I did that. See how BJP leaders are now backing the project to the hilt. I received bulk orders and business shot up. Last three years were crazy. Now we are back to square one - catering to around 6,000 buyers from nearby villages," he says.

The Memons rented out an entire building, accommodating around nine persons for Rs 21,000 a month during boom time. Now the building does not have any takers even for Rs 3,000 per month. The Memons had also started a transport business seeing the vast money involved. Dabhol Power Company (DPC) used to pay Rs 45,000 per month to hire a Tata Sumo. "Our drivers started their own business. After the crash, they have come back to us begging for Rs 2,500-a-month job. But now I can't afford them," he says. Nandu Bartakke, who owns a grocery shop in Guhagar, recalls how Rs 10 per kg rice would be termed as "expensive" by locals. "After they got jobs at DPC, however, their lifestyles changed. They wanted Surti Kolam rice, which costs Rs 24 per kg. If I said it was costly, they would tell me they couldn't digest the Rs 10 per kg rice. They forgot that they grew on that rice," he says. Most of these locals, who had suddenly become rich with their Rs 10,000-a-month jobs with DPC, are yet to get over the crash. Bartakke claims traders from Chiplun market, which is 35 km away from DPC site, reaped rich dividends. "They knew what an industry requires. They have been catering to MIDC's industrial estate at Lote Parshuram for years now. They carefully invested their money and focussed on what DPC needed. Hardly any of them ever indulged in temporary markets such as real estate or transport," he says.Agrees Shailesh Warwatkar, a shop-owner in Chiplun market. "We concentrated on chillar items such as plastic bags, ball pens and stuff like that. It was astonishing to see DPC paying Rs 5.25 for used gunny bag, otherwise priced at 60 paise in the market. DPC always wanted huge quantities in real quick time, and they paid any price that was quoted." 

Not all have made money though. For Hari Babu of S N Instrumentation, the experience has come as a shocker. His company was awarded a sub-contract by Punj-Lloyd. Babu came in February and by April, DPC was sailing in troubled waters. Since mid-June Babu has hardly had any work. He has sent back 78 people from his team and is awaiting further instructions from his company's office in Kolkata. "We will sue them. How can they a terminate six months' contract just like that?" says a livid Babu. But he knows the futility of his anger. "We will sue Punj-Lloyd. Punj-Lloyd will slap case against Sanscra, the French company. Sanscra will start legal proceedings against Bechtel. Bechtel will file suit against DPC and DPC will go in arbitration against Maharashtra Government. It's a long and never-ending chain." 

DPC auctioning jeeps, computers at throwaway prices 

Dabhol Power Company (DPC) and several other companies who were involved in the setting up of Dabhol Power Project, have started auctioning four-wheelers, computers and are likely to put on sale refrigerators and air-conditioners.The buzz in the area is vehicles like Tata Sumos, Mahindra Armada, Commander and Jeeps are available at throwaway prices. "They are selling vehicles kilo ke hisaab se. I heard a jeep was available for just Rs 27,000," said Warwatkar. Indeed, there were a few vehicles put on sale at the site carrying a price tag of Rs 29,000 for 1997 Commanders. But the tag also mentioned of major breakdown of engine as known defects. Most other vehicles were available at a minimum bid price of Rs 60,000 onwards and looked in bad shape after a rough use in difficult terrain. Bodywork was required in most cases. Locals, however, believe it's still a good buy.

The goods are, however, are offered to employees first, who bid their price. Some of them have started selling these goods at higher prices to others. Naseem Memon bought a Mahindra Marshall for Rs 1.11 lakh through one of the employees who had bought it at company auction, and immediately got an offer of Rs 1.25 lakh. Memon is not selling it just now. "I will repair it and I am sure it will fetch at least Rs 1.75 lakh to Rs 2 lakh.," he says. The area is flooded with buyers from Mumbai, Karad, Satara and Pune. Shortly, computers, fridges and ACs will also be put on sale and DPC employees will have their hands full with requests from outsiders.