Lessons from Enron deal

Sir, - This has reference to the article ``Enron deal: mid-course options before MSEB'' by Mr. Mahesh Vijapurkar (TheHindu, Dec. 21).

For the catch-22 situation in which MSEB finds itself, it has only itself to blame. What seems to have been a political decision in 1993 has landed the Board in a situation of ``biting more than what one can chew.'' Thus the MSEB finds itself having to pay for power which it is not buying. And there is no scope for evacuating the surplus power (from Dabhol Power Company) to Karnataka since the latter has no shortage at present and, more importantly, even in the near future a shortage will not enable it to buy power from MSEB at an exorbitant cost - a clear case of poor planning.

As convincingly brought home by the author, the serious predicament of MSEB (entirely avoidable) is wholly due to the Maharashtra Government having pursued all along unsustainable subsidies in the power sector. Unless the Electricity Boards in the States rid themselves of the shackles of vote-bank-centred subsidies by switching over to the much needed reforms, there is little hope to see ``light at the end of the tunnel''.

In this context it is relevant to point out that the State Governments must adhere to the tariffs fixed by their respective regulatory bodies from time to time. Also, it is essential that there is total transparency in fixing the tariffs, which can be ensured by tying up the tariffs with a component that takes into account variations in the cost of fuel and exchange rate (where applicable).

Arbitrary hikes of tariff are sure to attract needless agitations, if past experiences are anything to go by.

N. K. Suryanarayanan,

Bangalore

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