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Friday, 12 January, 2001, 15:22 GMT
Protest against India power project
Bombay skyline
The project was meant to serve India's growing energy needs
By Sanjeev Srivastava in Bombay

Indian labour unions have began a protest in the western state of Maharashtra against a multi-billion dollar power project set up by US energy giant Enron.

It is the single largest foreign investment project in the country and was cleared by the Indian Government eight years ago, as part of an economic reform programme.

Several Indian non-governmental organisations have opposed it from the very start.

They are now joined in their protests by the state government itself - which says that the power supply is too expensive.

Steep bills

The protestors plan to march 300km to the port town of Dabhol - where the Enron power station is located - arriving on 26 January, India's republic day.

Light
Consumers will have to pay more
Trade union leaders say they want to publicise the higher electricity bills Indians will have to pay once the project becomes fully operational - expected to be later this year.

Phase one of the 2,184 megawatt project became operational nearly a year and a half ago.

But the future of the project, which was intended to showcase India's commitment to globalisation, now looks uncertain with the state government talking of a review.

Opposition

The project - one of the largest gas-based independent power developments in the world - was cleared by one of western India's most powerful political leaders, Sharad Pawar, the chief minister of Maharashtra in 1993.

There were allegations of corruption and opposition parties and several NGO's opposed the deal for being loaded in favour of Enron.

Sharad Pawar
Sharad Pawar: Cleared the deal in 1993
The deal was renegotiated a few years later when power changed hands in the state.

A new government now wants to negotiate afresh.

Enron officials say they are willing to discuss the issue with local authorities, but will not favour any substantial change in the original contract.

Debate

Opponents of Enron say the cost of power supplied by the US company to the Maharashtra state electricity board is more than double the rates quoted by local power producers.

Enron officials however argue that the company's huge investment is one reason behind their prices being somewhat higher.

The hardening of oil and naphtha prices together with a weak Indian rupee have also contributed to the Enron tariff going up.

But its clear now that the present situation is not a happy one for either Enron or Indian consumers.

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See also:

21 Dec 00 | South Asia
India casts doubt on Enron project
10 Dec 99 | South Asia
US firm quits power project
15 Sep 99 | South Asia
India boasts fast track economy
22 Oct 99 | South Asia
Analysis: Upping the pace of reform
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