rediff.com: Dr Samir Kelekar on the Dabhol controversy


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February 21, 2001

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Samir Kelekar

Candles, anyone?

Power to the People!

In 1992 the Maharashtra State Electricity Board signed an agreement with the Dabhol Power Company, a subsidiary of Enron, to generate power from naphtha and natural gas.

The Maharashtra government in power then gave a guarantee to the DPC in case the MSEB defaulted on its dues. In turn, the central government at the time gave a counter-guarantee to the DPC, in case Maharashtra was also unable to pay up.

According to the agreement, the MSEB was to bear any increase in power costs due to changes in the price of naphtha or due to currency fluctuations. In the end, instead of being charged at a rate of around Rs 2 per kilowatt hour, the MSEB now buys power at Rs 8 per kilowatt hour, making it the costliest power in the country. In comparison, other privately-owned power generation plants, such as Tata's, sell power to the MSEB and Maharashtra at less than Rs 2 per kilowatt hour.

MSEB has now defaulted on its November 2000 bill of Rs 79 crores from the DPC. Maharashtra has defaulted on its guarantee as well, so the DPC has now invoked the central government's counter-guarantee. Then, the DPC dished out another bill for approximately Rs 152 crores for December. MSEB has defaulted on this payment also and the DPC has invoked Maharashtra's guarantee again. Another month, another bill. January's bill from the DPC is around Rs 125 crores.

That such hopelessly doomed agreements with the DPC were signed in the first place shows the moral and fiscal bankruptcy of the country's technocrats, bureaucrats and politicians. The current government will, of course, pass on blame to the P V Narasimha Rao government, in power in 1994.

But, let us be very clear. Anyone in the NDA government who had half a brain could have seen the adverse implications of this agreement. Not only that, the agreement could have been reviewed before now and suitable action taken to avoid the current catastrophe.

It has become standard operating procedure. The central government only acts when calamity strikes. It refuses to see the writing on the wall, be it an earthquake, a cyclone, or globalization.

Perhaps, the reason for signing such lopsided agreements are the kickbacks these officials no doubt receive. Interestingly, or rather, ironically, the current agreement with the DPC was finalised by Maharashtra's Sena government. Judging from the consequences of this agreement, it is now clear what Bal Thackeray means by his rhetoric of swadeshi; there is only "swa" and no "desh."

Of course, umpteen numbers of pro-globalization proponents will say let the government pay. If it doesn't, what will happen to our country's credit rating or future foreign investments? For me it is very clear. We do not want or need future foreign investment. Not if it means further impoverishment for our already poor nation.

Let us live with candlelight if we cannot generate something as simple as power. We don't deserve such power, we cannot afford such costly power. When a university such as Stanford in the US can generate its own power, (and sell what it doesn't need to local utilities at the currently exorbitant market rates), why can't this nation, a nation that claims to have the third largest pool of scientific manpower? Why can't India generate a basic necessity such as power?

It is time to see through this mantra of arbitrary globalization, globalization that is a backdoor to enslavement. Let us first learn the dynamics of globalization agreements; let us follow the experts' opinions before getting into such hopelessly losing situations.

Regarding the DPC, the first and most immediate step: do whatever it takes to stop more huge bills from the DPC. We can ill-afford to pass all of the governments' revenue, the people's money, into the DPC pockets.

Dr Samir Kelekar can be reached at konkani_net@hotmail.com

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