BOMBAY: The Maharashtra government last week decided to halt work on the first phase of the controversial Rs 9,000 crore Enron project and scrapped its second phase, finally putting to bed the on-again-off-again speculation about its future.

Ina statement to both the Houses of the State Legislature, the Chief Minister, Manohar Joshi, informed members of the decision on the scrapping, endorsed by his Cabinet in the morning and said the government was taking full advantage of its authority to cancel forthwith the second phase of the project.

The Maharashtra State Electricity Board (MSEB) and the State Energy Department would be shortly informed about the scrapping of the second phase.

With regard to the first phase, the government would issue orders for stopping work on the project having invalid the terms of the contract which, he said, were completely disagreeable with the best interests of the state and thus stood terminated.

 

Using rather strong terminology, Joshi described the contract as one of “zero pride and said accepting the terms of agreement in their present form would mean betrayal of the interests of the people of Maharashtra.

“Such a one-sided contract (loaded in favor of Enron) is a noncontract and the pride and welfare of Maharashtra being more important, we are willing to bear all financial implications of the cancellation and expose the motives of those who entered into such a contract,” he said.

The Chief Minister said the MSEB was being asked to take legal steps necessary that would flow from the cancellation of the contract. The five reasons stated in defense of the cancellation were lack of competitive bidding, undue secrecy during negotiations accompanied by a general lack of transparency, ignorance of environmental protection norms, acceptance of unnecessary expenditure on the project and the escalation on the cost of electricity that would be unfavorable to the people of the state, Meanwhile, the Dabhol Power Company (DPC) reacting to the Cabinet’s decision on the cancellation said that while it was aware of the reported announcement made by the Chief Minister in the state Assembly, “the ‘company has received no. official notice. The company remains available for discussions with the government ‘on any concerns it may have.”

Article extracted from this publication >>  August 11, 1995