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Re: Enron India Problem



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"Gautam Sampath Kumar" <gautamsk@hotmail.com> wrote:
>The issue here is why is the power so expensive in the first place.

Is it more expensive than other new power plants of the same size and
design? How does the price compare with the new plants that are coming
up in
California?

>It's
>because enron wanted to rob us blind by using LNG(an imported fuel) and

>linking the costs of power to the exchange rate.

Almost all the new power plants that are coming up in the U.S. use
natural
gas. What alternative fuel would you suggest we use?  Coal is very
dirty.
The ideal solution would be to tap India's vast hydro-electric power
potential.  We have the Anti-Narmada dam activists to thank for India's
dependence on imported fuels. In fact, I tried to explain this to a
seminar
of leftists once, but they just didn't get it.

>
>On our part our bureaucrats were stupid to agree to this, but we've
>learnt
>from our mistakes

In 1999, oil prices had crashed to single digits.  No one foresaw that
energy prices would skyrocket the way they did.  However, with the
global
economic slow down, and new oil supply coming on stream, the expectation
is
that energy prices will continue to decrease.  This is good news for
India
and it just might vindicate the bureaucrats.

>and this being a country-company contract, I should
>think
>that we must proceed to scrap the deal with enron. Or is the company
>more
>powerful than the country?
>
>When we deal with thieves and then realise we were robbed, any rational

>person would not think about agreements and honouring them.

How is Enron a thief?  Do you expect any foreign company investing in
India
to absorb the loss from India's currency depreciation, or the increase
in
energy prices?

>
>Maharashtra is a power surplus state and we need to cut down on T&D
>losses

Check your facts.  Maharashtra is a power deficit state.



>etc. What is the point in putting up "the world's largest gas-powered
>refinery" in a state that doesn't need such a huge plant, especially
>when
>inter-state transfer of power is restricted?

This restriction was supposed to have been removed years ago.  In fact,
Enron has often publicly expressed unhappiness at the slow pace of
Indian
power reforms.  Enron was probably led to believe that the power reforms

would be implemented quickly when the state was seeking its investment.


>This stinks of corruption,bribery and vested interests, but then we
>really
>shouldn't be surprised should we?

Your conclusion is too simplistic.
The real question is why does it take so long to implement structural
reforms in India?  Look at how slowly the disinvestment process is
moving.
The Congress Party is the main villain in the piece. Manmohan Singh who
initiated the reform process is now its principal critic.  If a
government
was given a gauranteed minimum term, it would not have to fear the
Opposition and could implement reforms quickly.


>The Bureaucrats put India in the coffin and those Indians who voice
>their
>support for those multinational thieves nail the coffin.
>
>I would suggest that some Indians first need to get themselves a
>backbone.
>
>Gautam



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