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Enron Mail |
Vince,
FYI. ---------------------- Forwarded by Sandeep Kohli/ENRON_DEVELOPMENT on=20 01/19/2001 05:12 PM --------------------------- From the Enron India Newsdesk- Jan 18th newsclips Untie Them (Editorial) Thursday Jan 18 2001, http://www.economictimes.com/today/18edit02.htm ---------------------------------------------------------------------------= --- ------- State not to give tax sops to DPC for buying naphtha from IOC, (Sanjay Jog)= =20 Thursday Jan 18=20 2001,http://financialexpress.com/fe/daily/20010118/fec18056.html ---------------------------------------------------------------------------= --- ------- Centre yet to receive proposal on Enron Thursday Jan 18 2001, http://www.economictimes.com/today/18infr02.htm =20 ---------------------------------------------------------------------------= --- ------- Untie Them (Editorial) Thursday Jan 18 2001 THE GOVERNMENT of Maharashtra wants New Delhi to convince the Power Trading= =20 Corporation, a central utility, to buy power from Dabhol and sell it across= =20 the country.It would be far simpler if Dabhol and all independent power=20 producers were allowed to sell power to whoever was willing to pay for=20 it.That, unfortunately, is not allowed by law, which forces private sector= =20 generators to sell power only to state utilities, which in turn, are not=20 permitted to sell power across states on their own.=20 Most state electricity boards are bankrupt . MSEB reportedly owes central= =20 utilities Rs 5,000 crore. They cannot bring themselves to charge many types= =20 of users for the power consumed, nor can they prevent large-scale theft of= =20 electricity. Few, including wealthy Maharashtra, have the will to reform=20 state electricity boards and privatise transmission and distribution. Given= =20 this profile of buyers, private generators demand sovereign guarantees to= =20 help them tide over default risks. But the guarantees merely insulate IPPs= =20 against risk. They cannot make SEBs solvent. Yet, India needs power=20 desperately. Maharashtra, India=01,s richest state, experiences power short= ages=20 of around 2,000 MW, about a sixth of its peak needs.=20 Over time, the hunger for power will only grow. India cannot afford to wait= =20 for the painful politics of SEB reform to work themselves out. The governme= nt=20 should bring in legislation that allows IPPs to sell power directly to payi= ng=20 customers.This will free IPPs from the clutches of bankrupt monopsony buyer= s.=20 The power trading legislation will have unexpectedly happy consequences for= =20 the government too.Once IPPs are freed from their onerous obligations to se= ll=20 power to single, mostly bankrupt buyers, their default risks will come down= =20 substantially. New Delhi and state governments should then scrap the=20 guarantees that they gave IPPs in the past.=20 The combination of power trading, private investments in generation,=20 transmission and distribution, and gradual SEB reform will create a=20 commercial, workable and competitive power market in India. Anything less= =20 will be a recipe for disaster.=20 ---------------------------------------------------------------------------= --- ------- State not to give tax sops to DPC for buying naphtha from IOC, (Sanjay Jog)= =20 Thursday Jan 18 2001 The Maharshtra government's finance department, which is striving to reduce= =20 fiscal deficit from Rs 9,484 crore to Rs 3,484 crore by the beginning of=20 April this year, has expressed its inability to provide a sales tax waiver = to=20 the Dabhol Power Company (DPC) on the procurement of 1.2 million tonne of= =20 naphtha from the state-run Indian Oil Corporation (IOC).=20 Mantralaya sources told The Financial Express on Wednesday that DPC would= =20 have to pay 4 per cent sales tax. "The government, way back in 1995, has=20 modified the sales tax rate to 4 per cent to discourage the import of napht= ha=20 from Gujarat by electrical companies operating in Maharashtra. The decision= =20 was taken with a view to encouraging electrical companies to procure naphth= a=20 at reduced rates within the state," government sources added. Sources said= =20 that these companies had to pay nearly 15.3 per cent sales tax on naphtha= =20 that was procured from Gujarat. However, following their representation, th= e=20 government slashed the sales tax rate to 4 per cent. =20 The state finance department's opinion, which would be presented before the= =20 state cabinet shortly in order to take a final decision, deserves special= =20 significance especially when the state energy department and the loss-makin= g=20 Maharashtra State Electricity Board (MSEB) have wholeheartedly supported th= e=20 DPC's cause and recommended the sales tax waiver. DPC, which was asked by t= he=20 Union ministry of oil and petroleum to procure naphtha within the country i= n=20 view of excess availability, in its presentation to the state government an= d=20 to MSEB, had made it clear that it would be left with no alternative but to= =20 pass on the additional burden on the MSEB which would be ultimately passed = on=20 to its consumers. DPC had also told the state government that it had not pa= id=20 sales tax on the procurement of naphtha from Glencore in the calender year= =20 2000.=20 Sources from the state energy department and MSEB have stressed on the need= =20 for such a waiver while expressing their inability to bear additional burde= n.=20 They have suggested that the state should reciprocate by offering a sales t= ax=20 exemption to DPC because the IOC, at the behest of the Centre, has tried to= =20 match the international landing price of naphtha during the recently signed= =20 memorandum of agreement with DPC. "If the state finance department sticks t= o=20 its views, it may hurt the state as a whole," sources from the state energy= =20 department and MSEB said.DPC will procure naphtha at Rs 11,050 per ton from= =20 IOC during the calender year 2001 as compared to the Rs 10,050 per tonne=20 price quoted by Glencore. The naphtha price comprises $175 per tonne free o= n=20 board (FOB), 21.8 per cent of customs duty, 5.4 per cent of sales tax and= =20 $18.87 of premium. =20 DPC senior vice president Mukesh Tyagi reiterated that the company has=20 already made an appeal to the state government for the sales tax waiver on= =20 naphtha in the larger interest of the consumers. "Sales tax is a pass throu= gh=20 and MSEB, which will have to bear the additional burden, will pass it on th= e=20 consumers," he added. ---------------------------------------------------------------------------= --- ------- Centre yet to receive proposal on Enron Thursday Jan 18 2001 CENTRE on Wednesday said that it had not recevied any proposal from=20 Maharashtra government seeking help to solve the tangle with the Enron=20 promoted Dhabol Power Project relating to cost and surplus power. Asked abo= ut=20 the reports that Maharashtra government was sending a proposal that centre= =20 buy surplus power from Dhabol Power Company through power trading=20 corporation, power minister Suresh Prabhu said "we have not received any=20 proposal." "We are carefully watching the situation and will await a concre= te=20 proposal before intervening in this matter," Parbhu said on the sidelines o= f=20 greentech environment excellence awards ceremony, here. Asked whether there= =20 was any possibility of the government asking the Power Trading Corporation = to=20 buy power from the Dhabol Power Corporation, Prabhu replied "what will the= =20 PTC do with the power?"=20 Prabhu had earlier asked the state government to study the matter before=20 approaching the centre for payment of dues. MSEB had earlier declined to pi= ck=20 up its 15 per cent stake in phase II of the 1444 mw project. The Enron issu= e=20 has been hanging fire with the Maharashtra State Electricity Board unable t= o=20 clear the dues of DPC as a result of the skyrocketing prices of Naphtha=20 infact MSEB has asked DPC to backdown completely leading to a situation whe= re=20 DPC has stopped production at the facility from the begining of the=20 month.State government has stepped in with support to the tune of Rs 114=20 crore to enable MSEB to clear the dues for October. MSEB dues to DPC for=20 November and December amount to over Rs 300 crores.=20
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