One sided nature of the MoU between the MSEB and Enron in the Dhabol Project

The World Bank commented on the MoU between Enron and the MSEB as that it was biased in favour Enron. After the WB’s comment on the MoU the GOI’s Central Electricity Authority (CEA) did their own analysis and found certain abnormalities in the MoU. The findings include:

i) no specific details of project costs were provided as per Indian Law

ii) the date of start of the contract and payments were not mentioned i.e when the electricity is available or when the contract was signed

iii) the payment structure was different from the usual norms

iv) high price of power higher than anywhere else in the country

v) no provision to scrutinize the project was made to make sure that the payment of MSEB was corresponding to the actual electricity cost

vi) while MSEB guaranteed to buy a minimum amount of fuel, the fuel supplier was not adhered to providing minimum fuel.

vii) no study of economical justification or verification of the price of fuel was done by MSEB

Even after all these findings the authoritative bodies of the GOI gave approval for the project which was immediately followed by MSEB signing the PPA with Enron. 

Still even more anomalies can be observed in the project which makes it obvious of the quantum of illegal movements which would have taken place in the project.

Article ref: http://www.atimes.com/reports/CA13Ai01.html