Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

Counter Enron’s Threats

The Enron’s Dabhol power company has authorised its management to terminate its contract with the Maharashtra State Electricity Board. This is yet another pressure tactic adopted by the US multinational after the total flawed and one-sided agreement to buy power from its Dabhol project has been thoroughly exposed. Earlier, the Enron invoked the counter-guarantee given by the central government when its exorbitant bills started piling up. It followed this up with invoking the political force majeure clause and then the arbitration clause. Both the Maharashtra State Government and the Central Government are caving in, under the pressure of Enron.

The step taken by the Maharashtra state government to pay the March dues amounting to Rs 134 crore is condemnable. After taking a stand invoking the penalty clause and demanding Rs 401 crore payment from the Enron company, the Maharashtra government has now given in to the threats.

The Godbole Committee has comprehensively exposed the fraudulent basis of the agreement between Enron and the Maharashtra State Electricity Board. On the basis of this report, Phase II of the project must be stopped. As for phase I and the agreement as a whole, a judicial enquiry has to be constituted to uncover those responsible for the swindle. Talk of renegotiating the contract is meaningless, unless it is clearly recognised that the earlier contract was a fraudulent one.

The threat of Enron winding up its plant must be met by a firm decision to make alternative arrangements for taking over the management and running the plant.