The Enron Jinx

It's a poll plank that could jeopardise the BJP-Sena's chances in three Lok Sabha seats—Ratnagiri, Rajapur and Kulaba—in the Konkan belt where the controversial Dabhol power project is located. Though these seats are held by the Congress, the recent assembly polls saw the saffron allies make inroads in the region, winning 13 of the 18 seats. In the six Bombay Lok Sabha constituencies too Enron could prove a sound whip, depending on how the Opposition uses it. At any rate, the electoral battle in the state with 48 seats at stake is bound to be affected by the Enron deal.

Less than a year ago, the BJP-Sena alliance rode to power swearing to dump Enron into the Arabian Sea. Their manifesto promised the "suspicious Enron deal will be reviewed". The tempo built up, and on the basis of "facts, circumstances and evidence", a July 1995 report by a cabinet subcommittee headed by Deputy Chief Minister Gopinath Munde recommended that"phase II of the project be can celled and phase I repudiated".

Earlier, a carefully crafted campaign, one end of it woven around a "corrupt" chief minister who had gifted a golden deal to the US transnational, helped pull the chair from under Sharad Pawar. Bringing back Enron, in what Chief Minister Manohar Joshi believes is "the best bargain any state government could negotiate", the ruling party seems to have pulled apart its campaign and handed the whip back to the Opposition. The move has sparked dissent within the Sangh parivar, which had taken up the swadeshi plank in the run-up to the Lok Sabha polls.

"They said they would drop Enron into the sea. same people have jumped into the sea and brought it back," says Vilasrao Deshmukh, chairman of the Congress' state election campaign committee. Adds Murli Deora, who chaired the parliamentary committee that examined the country's eight fast-track power projects: "There was no question of bringing in the second phase of the project. But now they have cleared it. Munde, Joshi and Bal Thackeray are on record about the great corruption by the Congress in the Enron case. Now they are bringing back Enron and stating that there was no corruption."

Today Enron has become a household word, the TNC's image moving from an icon of liberalisation to an example of exploitation. The governments dealing with it have suffered similar perception swings. Pawar's image took a battering while Munde, Joshi and Thackeray have moved from heroes who brought Enron to its knees to suspicious partners in a new deal.

Says Janata Dal leader Mrinal Gore: "All the steps they (the present government) have taken have been full of contradictions. Criminal charges in the suit filed against Enron in the high court remain, yet they have brought them back. Charges of corruption, like the Rs 65-crore Enron says it gave to 'educate' the Indians, remain unresolved. All that has been done is to drop the charges against the Congress. In the Lok Sabha polls it will affect their credibility." Given the public indignation, Gore's party is hoping to exploit the contradictions and recover former Union finance minister Madhu Dandavate's long-held Rajapur seat.

Joshi and Munde have made matters worse by issuing contradictory statements. In the Enron deal, the Congress had been charged with monumental corruption and Pawar was singled out as a recipient of Enron's largesse. Now the former chief minister is all set to convert it into a poll issue. "I am happy that the same political party which had said it would dump the entire project into the Arabian Sea has finally realised its importance," he says. He adds that on a personal level the whole episode "has proved beyond a doubt that the allegations they were making were false".

WHEN asked if he would exonerate the Congress of corruption charges, Joshi shrugs: "I am not prepared to sit in judgement." And Munde, who led a poll campaign against Pawar, says that he isnot interested in probing the latter's transgressions in the Enron case as "Pawar has already been exposed in public".

With the ball in the other court, it is no wonder that Pawar is happily levelling charges at the state government. He terms as an "eyewash" Joshi's claims of having arrived at an incredible bargain, which includes the power tariff reduction from Rs 2.40 per unit to Rs 1.86, saving the state exchequer Rs 25,000 crore over the next 20 years (the life of the project). Pawar's ally, Union Power Minister N.K.P. Salve, while congratulating the BJP-Sena combine for reviving Enron, said that only "cosmetic changes" had been made. Salve attributed the reduced costs to "omission of the regassification plant and also the fall in prices of power plants' hardware all over the world to the extent of 20 to 25 per cent".

While the left parties are drumming up public opinion against the deal, and politi cal parties are preparing the best strategy to exploit Enron, an embarrassed Sangh pari var is busy dousing the fire within. The saffron brotherhood's swadeshi line eschews Enron and Kentucky Fried, cola and jeans But it has had to digest a part of the Ameri can dream in the face of "political compulsions". Says RSS chief Vasantrao Tambe: "Our stand is still clear. America is looking for a market here. It is aggression against which we have to build public courage. The RSS does not come out on the street and agitate, but credit must come to us for awakening people who were chewing Kentucky chic ken." He brushes away any dissent, with the logic that "whatever happens in a family, happens in this parivar too".

But dissent is dying down, says a BJP leader from Bombay who graduated from the RSS. "The RSS has given a clear-cut green signal to Enron. Basically, there will be some agitation. Locals will fight. There will be a namesake agitation by the Swadeshi Jagaran Manch (SJM). Even its national joint con-venor, S. Gurumurthy, spoke of a 'peaceful' agitation. Just read between the lines."

Insiders say they have been pressured to rein in their outrage. Says a source who did much of the groundwork in building a case against the US TNC: "The SJM is getting caught between its agitation of the past and of embarrassing the present government to which it is ideologically linked. The perception is that the party is coming to power and this shouldn't be derailed. Those of us involved in the fight against Enron are angry but can't say much." Sources speak of a private meeting of the company top brass, the Sena chief and a BJP leader in the 48-hour-period when the state cabinet hesitated over a final clearance to Enron, which was announced on January 8. The company was reportedly told that "it would be taken care of".

However, accusing the government of sacrificing "principles for political expediency", Gurumurthy has made his position clear. He charged the government with allowing "the corrupt to go scot-free" and accepting "the corruptor as partner", in the process letting down the "patriotic and nationalist forces which fought against the Sharad Pawar-Enron axis and installed the combine in power". Stating that the SJM would "peacefully resist" the Dabhol project, Gurumurthy lists issues he feels have remained unanswered:

• The revival package is based on imported LNG as fuel for the project which the country cannot afford.
• The decision overlooks the charge against Enron as corruptor. A charge implied by the cost reduction accepted by Enron.
• The revived project, with 70 per cent linkage to the dollar, makes all cost projections in rupee rates meaningless.
• Revival was not based on objective criteria as the expert committee was only told to negotiate with Enron for the revival of Dabhol, not asked to investigate whether there was a cheaper or better alternative.
• The state government lost an opport-unity to revive the project through a swadeshi effort, like BHEL.