Leftists up in arms over Enron stake in Nambiars' Kannur power plan
Our Bureau
THIRUVANANTHAPURAM, January 2: Even as resistance to the reported move by Enron International to enter the energy sector in Kerala is mounting, KPP Nambiar, promoter of KPP Ltd, who signed a memorandum of understanding (MoU) with Enron, expressed confidence that the proposed Kannur power project would overcome all hurdles.Speaking to The Financial Express on Friday, Nambiar said he was concerned only about the success of the 513 MW power project. Nambiar refused to comment on the statements given by chief minister EK Nayanar and state power minister Pinarayi Vijayan, that they were in the dark about Enron's role in the Kannur project. When it was pointed out that he had earlier claimed that the KPP-Enron tie up had obtained government approval, Nambiar said, "I do not wish to join issue with political leaders". Nambiar denied reports suggesting that he was being favoured by the LDF government in the state, as he is a close relative of the chief minister. He also argued that fuel linkage for KPP
Ltd was granted by the Centre and not by the state government. Meanwhile, sources here said that the Central Electricity Authority (CEA) also had reservations about the Rs 1,467-crore project in which as per the MoU, Enron will hold a 74 per cent stake and KPP Ltd the remaining 26 per cent. The CEA has already been approached by certain other independent power producers (IPPs) with whom the Kerala State Electricity Board (KSEB) had signed power purchase agreements along with KPP Ltd. They have been reportedly told by the CEA authorities that it expected the state government to review the whole evaluation and selection process for fuel linkage, as directed by the Kerala high court. The court had on December 11, 1997 directed the state government to "consider the whole matter afresh", on an appeal filed by Western India Services & Estate Ltd. Western India had complained that they had completed all formalities before the deadline set by the state electricity board while KPP had failed. The high court
was of the view that the board had not followed the guidelines prescribed either. The plea by other IPPs before the CEA is that the KPP-Enron project does not merit consideration as the fuel linkage granted by state government is null and void thanks to the high court judgement. Again, the proposal for the WISE project is furnace oil-based, the only one of its kind, while KPP Ltd is proposal is naphtha-based. The Centre of late has been discouraging naptha-based power projects. Politically, the CPM-led LDF government has been put on the defensive with the controversy raging over Enron's proposed entry. This explains the denial of any knowledge about the KPP-Enron tie up by the chief minister and power minister. The issue is expected to be taken up at the CP's state conference in Palakkad. Party sources said that the statement issued by the power minister's office on Thursday was part of the bid to avoid any discussion on the subject at the state conference. CITU circles had taken strong objection to the
proposed entry of Enron. On Friday, the state capital witnessed several wall posters attacking the "back-door entry of Enron".
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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