Judicial probe into Enron deal announced

By Our Special Correspondent

MUMBAI, SEPT. 19. The Maharashtra Government today decided to go ahead with a judicial inquiry into the controversial Enron deal.

The State Cabinet decided to have the probe conducted by a former Judge of the Supreme Court, the Chief Minister, Mr. Vilasrao Deshmukh, told reporters here after its meeting. He denied that the inquiry would affect efforts to find a solution to the Enron problem including the exit of the multinational from the Dabhol Power Company.

``In fact the judicial inquiry would help make the process of finding a new buyer error-free,'' the Chief Minister said. The yet-to-be-appointed judge will have six months to complete his task.

The terms of reference of the probe include examination of validity of all approvals, permissions and licences given to Enron with a view to finding out if the Government machinery made any mistake.

The Commission would also examine the veracity of all the information presented by the power company about the project cost, capital cost, financial arrangement, power demand and supply, etc, to see how this had affected the tariff rates.

The circumstances in which the earlier power purchase agreement was negotiated, signed and repudiated, the reasons for its renegotiation and the signing of the new agreement would also come under scrutiny. The enquiry would also examine the role played by persons concerned and the circumstances in which the agreement for the second phase was made binding, the decision- making and also whether the decisions made were in the interest of the State. The inquiry is expected to put pressure on Enron, the opponents of the Congress within the Democratic Front and the Opposition.

Inappropriate, says DPC

The DPC said the probe would ``further delay the resolution of the outstanding issues'' and the inquiry itself was ``inappropriate.'' Many of the issues to be considered by the judicial probe ``are currently the subject existing disputes'' between the DPC and the Maharashtra State Electricity Board, the Maharashtra Government and the Centre.

``It is improper for the Government to bring its executive powers to bear against the DPC while we are seeking to resolve on going commercial disputes through previously agreed dispute resolution procedures,'' it said in a statement and pointed out that in 1997, the Supreme Court had said ``it was not in the pubic interest'' to reopen the question of validity of the project.

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