Enron Mail

Subject:Dahbol - PPA and Permits/Approvals Compliance
Date:Mon, 11 Dec 2000 05:01:00 -0800 (PST)


----- Forwarded by Rob Walls/NA/Enron on 12/11/2000 01:00 PM -----

12/11/2000 11:39 AM

cc: Rob Walls/NA/Enron@Enron
Subject: Dahbol - PPA and Permits/Approvals Compliance

Rebecca/Jim -

The India legal team has completed two important reviews:

Permits/Approvals Review. Sandeep Katwala led a group reviewing our permits
and approvals. They feel pretty good about our compliance with these
permits/approvals. As you have heard on previous phone calls, the day tank
seepage some time ago makes us the most nervous. It seems to us that a
release from the site resulting in substantial groundwater contamination
plays pretty well in the court of public opinion given DPC's failure to "come
forward" on the issue (even though it was advised at the time of the release
that it had no legal obligation to do so). Sandeep's note is below.

PPA Review. Paul Kraske led a group reviewing the PPA. His memo on this
issue is also below. He feels pretty good about our ongoing compliance with
the PPA. The instances of the non-compliance are not particularly material
and none would appear to play well in the court of public opinion. I should
also note that it would be very difficult for MSEB to lawfully terminate the
PPA -- that remedy is not readily available to MSEB under the PPA terms.

Both review efforts have relied somewhat on the representations of DPC
personnel. The India legal team was able to "tie down" many significant
issues with written documentation but in many cases have relied on the oral
representations of our own employees to confirm compliance with our

There are a number of other legal review efforts underway and I will keep you
apprised as these reviews progress.

---------------------- Forwarded by Bruce Lundstrom/ENRON_DEVELOPMENT on
12/11/2000 10:21 AM ---------------------------

Sandeep Katwala
12/11/2000 07:43 AM
cc: jinman@linklaters.com, niyer@linklaters.com, kthakore@linklaters.com,

Subject: Re: PPA Compliance - Attorney Client Priviledged

Lauren, Narayan and Kunal have completed their review of DPC compliance with
clearances. Based on discussions with DPC personnel and a review of
correspondence where relevant, no material non-compliance issues have
surfaced which I feel would pose a problem under the PPA. There are two
instances under the Reserve Bank of India approvals DPC has failed to submit
reports to the Ministry of Finance within the time frame indicated; these are
however minor issues. We have to accept that there may be practical instances
where there may not be strict compliance at the site (eg the actual
construction of physical assets is not strictly as per the layout approved by
the authorities) but, from the discussions with DPC personnel none of these
have come to light. On the environment approvals DPC has submitted compliance
statements to the Maharashtra State Pollution Control Board which confirm
that DPC is in compliance with the conditions in the relevant approvals. We
have relied on these statements as being accurate.

With respect to the water pollution issue, as we saw on Saturday, DPC has
notified MPCB pursuant to the show cause notice of the measures taken to
mitigate the pollution off the site. That correspondence seemed to indicate
that there should be no further problems with this issue. However, my sense
is that we have not seen the end of this issue and in particular, the report
currently being prepared by GSDA has not yet surfaced in final form. There is
no guarantee that it will be positive. Shobhan's view that it is difficult to
see how a Court would support an injunction of some sort shutting down the
plant "permanently" given the remedial measures taken by DPC is persuasive -
you can however see that it provides excellent ammunition for PR purposes.


Paul Kraske
12/11/2000 06:23 PM
cc: jonathan.inman@linklaters.com, Pancharatnam

Subject: PPA Compliance - Attorney Client Priviledged

Attached is a short note we prepared summarizing our conclusions after an
initial review of PPA compliance. Please feel free to call if you have any
questions regarding the attached. Regards,