Secondly, Munde said following renegotiation, the capacity of the power project has been enhanced, but the State was not required to contribute for the same.

The observation of CAG that the levellised tariff will come to Rs 4.69 per unit is also incorrect since it has taken into account the administration charges, transmission losses and expenditure involved in the distribution system. "I feel that the final levellised tariff will be much less than estimated by theCAG," Munde said.

The Deputy Chief Minister said that MSEB's reply on CAG's objections will be submitted to it and also to the Public Accounts Committee of the State Legislature. Referring to the observation of CAG that the State Government could have revised the deal without suspending the entire agreement, Munde said there was no alternative to cancelling the whole agreement.

"We had urged Enron to renegotiate for the second phase. However, there was no response from them. The Enron officials also did not appear before the Cabinet Sub-Committee. Under the circumstances, the government had to cancel the project," Munde added. Even CAG's observation on the constant fuel price is incorrect, he claimed. "The CAG has submitted that the levellised tariff was projected assuming constant fuel price of liquified natural gas for 20 years, while the compound annual growth rate of basic prices for natural gas in India during the period 1987 to 1995 works out to three per cent," Munde said.

However, as perofficial records, there is no such increase in the prices of liquified natural gas in the international market, he added.