MUMBAI, February 23: RPG Enterprises is negotiating with US energy-major Enron International to sell out a portion of its equity in Balagarh Power Company. The RPG group unit is setting up a 500-mw Rs 2,000-crore coal-fired project in West Bengal.RPG Enterprises, which had signed a memorandum of understanding with Enron for promoting power projects in West Bengal, made a formal proposal to the US company when Enron International chief operating officer Joseph Sutton and Enron India CEO Sanjay Bhatnagar visited Calcutta last fortnight.
While Enron is yet to state its stand, "we have nothing to say" is the Enron spokesperson response, it is learnt that a due-diligence about the proposal has already been commissioned and a concrete picture will emerge within a couple of months.
The Balagarh project, conceived about five years ago, has had troubled times with the group running short of enough financial muscle to set it up simultaneously with its flagship's Budge Budge power project.
The sell out of itsinternational partner Rolls Royce's power equipment division proved a further setback to the project. However, last year German engineering major Siemens decided to step into Rolls Royce's shoe as a 10 per cent equity holder. Siemens will pick up its equity through an equipment supply contract. The project, which has a proposed equity of around Rs 650 crore, also has the International Finance Corporation as a partner.
According to sources, the proposal to Enron follows a collective decision within the group to take maximum advantage of its MoU with the Us firm. While matters are being kept under wraps, it is learnt that the scope of collaboration may also be extended to cover the functioning of CESC in the long run.
Insiders suggest that Enron will acquire the stake through its wholly-owned domestic subsidiary -- Enron India -- and it completely dovetails with Enron's plan for the country. Enron International CEO Rebecca Mark recently made a major pitch on behalf of Enron as a developer of energy ofresources in the Eastern region.
On top of Enron's priority list is working out a feasible pipeline project linking the natural gas supplies in Bangladesh and Tripura. The pipeline is one of the most prestigious project in the Enron camp and is considered to be vital in energising the entire eastern region which is largely dependent on coal-fired projects.
The Left-front government in West Bengal is expected to play a key role in helping it crack the deal and considerable progress has been made in this regard during the talks held last fortnight featuring Sutto, Bhatnagar and a high-level state government delegation.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
