Centre clarifying guarantee to Enron, says Power Minister

MUMBAI, JULY 13: The Union Government’s guarantee to the Enron’s Dabhol project is not a counter-guarantee for the second phase and “we are clarifying it with them”, said Union Power Minister R Kumaramangalam. However, the Government is considering Enron’s request to open an escrow account, he added.

On the higher-than-estimated price of power from Enron, Kumaramangalam refused to comment, saying he had heard the rumours too but had not studied the issue. However, people must pay the generation costs because for too long, power has been treated as a service like, say, primary health or education that the Government must provide. “Power is a commodity like any other; it’s not a service, and therefore, it has to be paid for,” he remarked.

Kumaramangalam also claimed that it was possible for the State electricity boards to provide free or subsidised power to certain sections of the population and still make profits. “The Tamil Nadu board is a good example of this,” he said, asked about the additional financial burden on the Maharashtra State Electricity Board from Enron’s bills and the political decision to provide free/cheap power to farmers. “In such cases, the State Government is obliged to pay the amount to the State electricity board. I have said this to the Government in letter and law (sic),” he added.