dhabol jeff shall forward shortly copy message sandeep numbers requested follows extracts two recent articles power situation india published financial times first article describes recent power outage northern india affecting millions people one possible line defense pointing value output lost due power shortages obvious value lost production exceeds cost power produced dhabol plant expensive may power cut affected 230 million people second article enron specific vince asia pacific power failure hits north india financial times jan 3 2001 angus donald tens millions people left without electricity northern india yesterday power grid breakdown electricity gradually switched areas parts capital new delhi 60 70 per cent supply expected restored end day according power grid officials associated chambers commerce industry assocham leading business organisation expressed deep concern called mechanism prevent future disruption could cripple economy power failure across eight indian states including new delhi disrupted train services water supplies telephone network forced hospitals switch emergency generators fault occurred northern grid provides electricity 226 people affected states delhi haryana punjab uttar pradesh himachal pradesh madhya pradesh rajasthan jammu kashmir breakdown sub station kanpur uttar pradesh india populous state caused overload power lines failed well trains stopped running day signals systems damaged new delhi international airport also slightly affected power supply could engaged probe reasons failure likely technical failure investigate happened suresh prabhu power minister quoted saying press trust india india suffers regularly power problems lack funding upgrade infrastructure theft supplies also big problem thirty per cent country electricity stolen according analysts new delhi much 50 per cent stolen two years ago power failure blacked uttar pradesh delhi hours assocham issued statement saying increasing industrial demand would exacerbate problems already faced india inefficient power sector slow progress particularly strengthening transmission distribution system ever increasing theft contribute worsening power supply situation copyright financial times limited copyright financial times limited 2000 ft financial times trademarks financial times privacy policy terms jan 3 2001 khozem merchant enron us energy producer constant target criticism india hitting back campaign reverse image profiteering multinational myth reality offensive local newspapers follows west indian state maharashtra decision review tariff pays texas based company whose dollars 2 2 bn electricity generating plant dabhol india biggest single foreign investment maharashtra tariff doubled since 1993 three times greater charged independent power producers ipps tariff risen depreciation rupee dollar high falling price naphtha fuel state also pays fixed capacity charge rs 970 dollars 21 month reflecting huge project cost controversially irrespective consumption showdown looks inevitable reminiscent clash six years ago damaged india appeal foreign investors former official world bank criticised deal says enron emerging east india company 21 st century reference british trader colonised key areas indian economy 19 th century stand latest blot india power sector uk powergen cogentrix us quit india recently frustrated long approval procedures inadequate payments mechanisms higher returns elsewhere india lost time opportunity driven returns six percentage points says gerry grove white former india general manager powergen sold 655 mw plant gujarat china light power hong kong india national plan five years 2002 says generating capacity must rise 40 000 mw 120 000 mw since 1992 ipps added 3 000 mw 2 500 mw remains construction insufficient support official projections 6 8 per cent economic growth enron bellwether india liberalisation winning fast track project approval early 1990 phase 1 740 mw plant fuelled expensive naphtha came stream may 1999 phase 2 dollars 1 87 bn plant 1 624 mw capacity run cheaper liquefied natural gas lng completed year two seven fast track proposals achieved financial closure outset enron encountered attacks culminating maharashtra nationalist government cancelling project renegotiating terms less onerous vilasrao deshmukh chief minister successor government says power purchase agreement unaffordable enron whose attackers also include cultural chauvinists wants maintain good political relations hostile lucrative environment enron views india testing ground evolution traditional manager power plants broad based trader commodities energy gas bandwidth support ambitions enron hopes trade energy power surplus deficit states legislation passed year building lng terminal pipelines trade imported natural gas laying 15 000 km fibre optic network trade bandwidth space country desperately short new economy commodity event enron believes watertight contract supported many believe subversion contract would confirm investor perception maharashtra india financial industrial hub unreliable destination investment mr deshmukh avoided language predecessor threatened dump dabhol arabian sea pressure radical members wobbly coalition options limited scrapping project would ruinous economically troubled state would compensate shareholders maharashtra state electricity board local utility enron main client obliged dispatch take 90 per cent dabhol output yet mseb never honoured guarantees take averaged 60 per cent since plant opened effect mseb paying lot consuming lot less power one reason take low state tough new regulator told mseb buy cheaper sources enron says tariff would rs 4 02 kwh mseb take averaged 90 per cent take third lower average tariff rs 4 94 per unit often higher october tariff rs 6 91 per unit take 49 per cent enron says tariffs come phase 2 run cheaper lng starts cost pressures forced mseb take half 30 per cent equity option phase 2 enron acquired balance mandated bankers find buyer enron difficulties undermined appeal ipps failed deliver flood investments potential ipps feared would never paid state generating boards become byword corrupt management power reform state electricity boards whose uneconomic pricing means industrial users subsidise poor farmers well transmission distribution services check huge theft technical losses overdue given limited resources money would better spent rather new plant says oliver blackaby managing director n rothschild india advising karnataka privatisation distribution network moment attention fixed enron ability satisfy competing interests investors clients sanjay bhatnagar chief executive officer enron india said recent trade magazine one key lessons learned phase 2 flexibility deal externalities copyright financial times limited copyright financial times limited 2000 ft financial times trademarks financial times privacy policy terms conditions