'Enron used clout to put pressure on India'

April 15, 2002

India's poor foreign exchange reserve prompted it to take up the

Enron promoted Dabhol project "with peculiar terms and conditions",

an investigative report on US television has said.

America's top rated television programme, CBS-60 Minutes, in an

exclusive story on Dabhol project Sunday night, concluded that the

energy-giant "Enron used its clout to put pressure on India to honour

the deal even if it was commercially unsound".

The report said: "money may have changed hand as Enron never

explained what it meant by saying that it spent $20 million

to 'educate' Indians on the project."

Enron's White House contacts were evident, it added, as vice-

president Richard Cheney raised the Dabhol issue during the US visit

of leader of Opposition Sonia Gandhi.

CBS pointed out that while other foreign investors took risks in

their projects, Enron's Dabhol project was unique as it was supposed

to be a risk-free one.

The electricity generated by it was four times costlier than other

companies and the Maharashtra government was supposed to purchase it

at a 25 per cent profit to the company whether there were customers

for it or not.

CBS noted that it was a project, which India accepted without

competitive bidding and the World Bank, after examining the project,

declared it unsound and declined to finance it.

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