India may let power project deal pass
India may let power project deal pass
By Clarence Fernandez
BOMBAY (Reuter): Differences between the rightwing Hindu
parties ruling India's richest state may enable the country's
largest power project to squeak through despite threats to scrap
it, political analysts and newspaper editorials said last Friday.
The two parties rode local opposition to the $920 million
project at Dabhol on Maharashtra's west coast to win power in
March on promises to review the contract between the state-run
electricity board and the Enron Corporation, the U.S. company
building the plant.
Newspaper editorials last Friday said the Maharashtra state
government was seeking a way out of the Enron tangle with its
decision to place the review report before the legislature,
scheduled to reconvene on July 5, instead of deciding
immediately.
A legislative endorsement of the venture, The Times of India
said, would provide a face-saving device for the coalition of the
national opposition Bharatiya Janata Party (BJP) and the regional
Shiv Sena.
This was a likely outcome, the newspaper said, since not all
the Shiv Sena-BJP legislators are against the project, and only
those from the coastal region were vocal in their opposition.
"The alliance can claim that even though it was keen on
fulfilling its election promise, it was helpless in the face of
the legislature's endorsement of the venture. The rejection of
the report will not necessarily mean a defeat of the government,"
it said.
The opposition Congress Party could vote with the Shiv Sena to
allow the project to go ahead, perhaps with modifications,
analysts said.
Maharashtra Chief Minister Manohar Joshi, visiting the United
States to reassure investors of his government's commitment to
economic reforms program, said on Thursday it would take only a
week to make a decision on the report of the review committee.
The review of Enron's contract, which critics say sets too
high a price for the power the plant will generate, was
originally due in May.
Analysts say the one-month delay granted to the review
committee indicates a tussle between the BJP and the Shiv Sena.
"Obviously the BJP wants the Enron project scrapped because it
is looking at the national elections," an analyst with a Bombay
investment firm said. General elections are due by next May.
"But the Sena, the real party in power and taking all the
decisions, has realized it has drastic ramifications," he added.
Recent U.S. and British appeals that scrapping the Enron
project would jeopardize foreign investment were angrily
condemned by Indian opposition parties as interference.
The project is seen as a test case for the success of the
economic reforms launched by the nationally ruling Congress
government of Prime Minister P.V. Narasimha Rao.
While the BJP has spearheaded opposition to the project, the
Shiv Sena is seen to be veering to the view that the project
might be acceptable with certain modifications.
An editorial last week in the Shiv Sena newspaper, Saamna
(Confrontation), said scrapping Enron would not be a solution to
the problem.
But, the article said, to permit it to go ahead would be a
betrayal of the people of the west coast, who protest that the
project will endanger their farming and fishing livelihood.
"A third alternative must be found," the editorial said, but
offered no solutions.
The Times said political expediency had prompted Joshi's move
to call a vote in the state assembly.
"Clearly the BJP-Shiv Sena government has boxed itself into a
corner by adopting heroic postures in opposition which it finds
it cannot reasonably sustain in government," the newspaper said.