Laws Flouted In Signing Dabhol Deal

The government violated its own laws while signing the contract with Enron Corp for the controversial Dabhol power project in Maharashtra, according to the National Alliance of Peoples Movement.

The voluntary organisation, in a memorandum to Prime Minister H D Deve Gowda, has listed instances of violation of the Electricity Supply Act (ESA) in the signing of the contract.

It has also challenged the government to face a public debate on the project.

The organisation points out that the tariff agreed upon was three times the tariff of the present national grid. This, it says, was in violation of Section 43A of ESA.

 

The movement says the Prime Minister, the Union power minister and the Maharashtra Chief Minister agreed to guarantee a 56 per cent rate of return on equity for the Dabhol project while ESA permits only 16 per cent. This is considered in violation of Section 43A of ESA.

The contract, says the organisation, also violated Section 30G and Section 55 of ESA since the sanctioned capacity of 2,400 mw for the project was three times the capacity recommended by the 14th Electrical Power Survey to meet the power shortage.

These two sections were again violated since the project was guaranteed a 90 per cent offtake (base load status) while there was an excess base load capacity of 1,000 mw in Maharashtra. The projected shortage is only in peaking capacity.

The organisation says the base load status for the Dabhol project would cause a loss of Rs 1,200 crore to the Maharashtra State Electricity Board as the generation at its plants would have to be backed down.

This, says the organisation, is in violation of sections 55 and 59 of ESA.