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Labour unions march against Enron

Indian labour unions began a protest march on Friday against a power project by Enron Power Corp in Maharashtra -- the single largest US investment project in India.

The protesters started their march from Uran, 45 kilometres from Bombay, and plan to walk 300 kilometres south to reach the port town of Dabhol, the site of the power station, on January 26.

"Our idea is to create awareness among people regarding the high electricity costs they will have to pay once the Enron power station is fully operational," Vivek Monteiro of the leftist Centre of Indian Trade Unions said.

"We also want to show that the Enron project is against the interests of the state," he added.

Maharashtra State Electricity Board had defaulted on payments to Enron worth Rs 2.6 billion for October and November, and the state government stepped in to bail out the board.

Another bill of Rs 1.6 billion for December will be due later this month.

The state government on Wednesday decided to pay Enron Rs 1.4 billion following warnings by the US company that it would invoke bank guarantees.

The state and federal governments have given sovereign counter guarantees for payments due to Enron from MSEB.

Maharashtra's Congress party-led coalition government has been pushed into a corner over the Enron issue, as its leftist allies have demanded the scrapping of the power purchase agreement with the US giant.

Chief Minister Vilasrao Deshmukh said the MSEB was being billed almost Rs 8 per kilowatt hour for the electricity produced by Enron.

"We cannot afford such costly power. We want to renegotiate and review the project," Deshmukh said.

The contract for the two phase, $3-billion project for a 2,164-megawatt power station at Dabhol was first signed with Enron subsidiary Dabhol Power Co. in 1993 soon after India opened up its power sector.

The first phase, which uses naphtha as fuel, began commercial operations in 1999, while the natural gas-based second phase is still being built.

The project was scrapped in 1995 and renegotiated in the same year by the state's previous government, which had been told that the electricity would cost Rs 1.86 per kilowatt hour.

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