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Re: Enron India Problem



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>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?

First of all,why compare power costs in california to what it is in India. 
Why do we need these power plants, when Indian companies are willing to 
supply power at 2/2.20 per unit.

The situation in Tamil Nadu for instance, is that agreements have been 
inked, where the cost of power is envisaged to be Rs.5/unit. When Indian 
companies came up with offers of supply power at Rs.2 the answer was, sorry 
we don't need your power, we have agreements where we buy power at 
rs.5/unit!!!

>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.

I suggest we look into co-generation projects in conjunction with the Indian 
sugar industry to produce bagasse-based power. The potential is about 14,000 
MW. Also let's try and resolve political issues with hydro-electric power as 
the potential is huge.

While coal may be dirty, we do have it in abundant quantity, and we must 
strive to use what we have(coal) rather than what we do not(LNG), to setup 
new power plants. Development-Environment is always a tradeoff, you cannot 
have development without pollution. Let's try and achieve some sort of 
balance.

>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.

As you may know, energy prices or any "global" prices for that matter follow 
a cyclical path going up and down, and hence there is no question of 
vindication. When the price comes down, they are vindicated and when it goes 
up, they are at fault??

They should not have linked a sector such as power to international vagaries 
in the first place. There is no vindication.

>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?

These are the same people who sing the praises of the "free market". I 
should think that they must face energy price increases and currency 
depreciation, as these are faced by any manufacturer in any industry. If 
there is a manufacturing industry where there is no possibility that raw 
material prices will go up, then where is the entrepreneurship or the risk?

Why have you insulated a "capitalistic" firm from price increases, currency 
depreciations, and given them state and centre guarantees to go with it? Can 
you name any person in the world who would not invest in power in India? 
Even you and I can setup the power plant then.

> >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.

This I'm not sure about, so I'll concede the point till I can get the needed 
info.

>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.

People say, enron is not to blame, all the EBs are inefficient, and sectoral 
reforms are not moving. Please delink these issues. Yes, the MSEB has to be 
reformed and power reforms have to go ahead, and yes inter-state power trade 
must be allowed, but for various other reasons outlined above dabhol should 
never have come into existence.

>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.
>

Certainly. It's despicable the way congress has been stalling parliament 
after the tehelka expose and also the disinvestment process. They're wasting 
tax-payers money. I wonder, is there nothing we can do about this. They 
serve us, not the other way round, we forget that sometimes.

But don't rule out the corruption part. Dabhol's accounts, have shown under 
the heading "Education", expenditure as 65 crores. I wonder what sort of 
education they're talking about.

I'm sorry. Enron is not a thief. that's a mistake on my part. after all is 
that anyway one refers to the future(current?) rulers of this country?

-Gautam
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