Kannur Project: Govt. says no to El Paso

By P. Venugopal

THIRUVANANTHAPURAM, APRIL 5. The State Government has disallowed the participation of the multinational company, El Paso Energy Corporation, in the 513 MW Kannur Power Project promoted by the K.P.P. Nambiar and Associates (KPPNA).

This decision has been communicated to the KPPNA, according to official sources. The Kerala High Court, while dismissing a petition filed by the KPPNA, had directed the Government to take a final decision on El Paso's participation in the project before April 2. The High Court has also been informed of the decision, the sources said.

The KSEB's board of directors the other day had examined KPPNA's offer to bring El Paso as the foreign partner and came to the assessment that the foreign exchange component and the power tariff structure indicated in the proposition were unacceptable. The board also felt that an earlier decision in favour of El Paso's participation, taken when Mr. Sukumar Oommen was holding the chairman's post in the KSEB, was a hurried one.

This is the second time the LDF Government is setting its face against a foreign company brought by the KPPNA to associate in the project. The Indian promoter had first introduced the Enron Corporation as its foreign partner in March 1998. That proposal was rejected in February 1999 following a decision taken at the level of the CPI(M) politburo.

El Paso came into the picture in July 2000. The involvement of this multinational company in the project became controversial soon after, when the chairman of the KPPNA, Mr. K.P.P. Nambiar, alleged that the Electricity Minister was trying to torpedo the project. Mr. Oommen was removed from the post of the KSEB chairman at the height of this controversy.

The Indian promoter is free to submit to the KSEB a fresh proposal with another foreign partner and a more competitive tariff structure, according to the sources in the Government.

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Section  : Southern States
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