Enron Ready To Invest $10 Billion
Enron Corp of the US has submitted a $10 billion proposal to Prime Minister H D Deve Gowda for five to seven power plants that will generate 10,000 mw. However, the company's insistence on a counter-guarantee from the Centre could be a tricky issue.
The plan envisages setting up of five to seven power plants, with capacities ranging from 1,000 to 2,000 mw, in northern India as well as along the coastline in southern states.
Enron Development Corp chief executive Rebecca Mark told newspersons in New Delhi on Saturday that the new plan reiterates Enron's continued interest in India and would go a long way in solving the country's energy problem. She pointed out that Enron would be only the developer and put together financiers and other collaborators to set up the projects.
Mark, however, said that counter-guarantee is an issue. We will have to find a way on that to make it work in different states. The Centre has already stated that it would not offer a counter-guarantee to any power project other than the seven fast-track ones.
We plan to organise a group of companies, which would include both Indian and foreign companies. Fifty per cent of the project cost will be met by foreign capital while the remaining will be provided by Indian companies. But the bulk of that money (to be invested by Indian companies) will have to be raised from abroad, said Mark.
The debt-equity ratio of the project is likely to be 70:30. The plants will use liquefied natural gas (LNG) as fuel. Mark pointed out that the project would be able to produce power at a cost of below five cents per kw-hour, assuming a zero import duty on LNG. The current international prices are over six cents per kwh.
She said Enron had sounded out some foreign companies and hoped to rope in domestic public sector giants like NTPC, Gas Authority of India Ltd, and IOC, besides private corporate houses such as Reliance, Tata and the RPG group.
She said the company would be just another participant and would not seek a controlling stake in the venture. Ten million tonnes of LNG will be sourced from the company's plant in Qatar. LNG is considered a cleaner and cheaper feedstock than naphtha.
The power plants in the coastal regions would have the advantage of easy accessibility to imported fuel, Mark said. The fuel will be carried in tankers to the mainland and supplied to various plants through pipelines. The company initially plans to use the pipelines owned by public sector oil companies and instal its own network later. Mark said the project could be commissioned by the year 2001, if the government cleared it in six months. Work on the power plants will begin depending on how soon the state governments would be able to ratify the project. The bids made by Enron for power projects in Tamil Nadu are part of this mega venture.