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Maharashtra govt slams Enron, CRISIL

Swati Kulkarni in Bombay

The embattled Democratic Front government in Maharashtra appears to be heading for a showdown with the US energy giant Enron over its decision to invoke state and central government guarantees following MSEB's inability to pay up its dues.

Meanwhile, minister for finance and planning Jayant Patil and energy expert Pradyumna Kaul have accused credit rating agency CRISIL of being in league with Enron while downgrading the state's credit rating to B++.

Speaking to newsmen earlier, Patil remarked: "It does not befit CRISIL to resort to such a measure. The government has taken a principled stand not to pay up Enron's dues as it wants to renegotiate the power tariffs."

"Moreover, the government, so far, has not defaulted on its payment to other corporations," he said.

He also expressed doubts over the 'real intention' of Enron's decision to invoke counter-guarantee while the state had pledged a Rs 1.35-billion letter of credit to it.

Patil said that for a small amount of Rs 790 million, the Enron has invoked the counter-guarantee rather than the LoC.

On the other hand, noted energy expert Pradyumna Kaul has alleged that there's a nexus between CRISIL and Enron. He said that both have simultaneously taken such steps which raise doubts.

Kaul described their moves as 'well-orchestrated' and demanded that CRISIL's managing director Ravi Mohan should resign within 48 hours.

He added that a "criminal case could be filed against Enron, Dabhol Power Company, and CRISIL for their involvement in a plot which is aimed at hitting hard at foreign investment in the state".

He said that the "anti-Enron campaign does have documentary proof that the power purchase agreement (PPA) was prepared illegally in Houston in the US".

He said that if the state government takes a tough stand on the issue the credit rating agency can fall in line.

Patil stated that although the central government might pay up the dues, ultimately it shall cut back the grants given to the state.

He said that this project was realised due to the initial spadework done by the central government. The latter now cannot shy away from the responsibility. The Centre should share some of the burden of the state by taking power from Enron.

When asked why was not the government paying up, Patil stated: "If every month they (Enron/MSEB) come to me, where do I pay up from?"

He said that the sole aim of the government is to renegotiate the power tariff and bring it down to Rs 2.50 per unit so that the consumers do not feel that injustice has been done to them.

He added that if the society at large feels cheated, even the investors (Enron) may be forced to have a second look at the tariff as the issue could adversely affect their image internationally.

SEE ALSO:

Enron invokes Union government guarantee

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