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LME Base Metals:Aluminum Ends Officials Dn On Fresh Sales
Dow Jones Commodities Service, 07/06/01 ENTERPRISE INTERVIEW: India's salesman to the investing world AsiaWeek, 07/06/01 India: Dabhol delay: RCF turns to BG Business Line (The Hindu), 7/06/01 `Reduce government debt by Rs 2000 crore The Economic Times, 07/06/01 RCF plans to ink supply pact with British Gas Business Standard, 07/06/01 Economics fuels power solution in California Price relief gains political support Chicago Tribune, 07/06/01 COMPANY NEWS ENERGY PROVIDER IS PLANNING TWO ACQUISITIONS The New York Times, 07/06/01 Business Brief -- NewPower Holdings Inc.: Division to Acquire Assets Of AES's Power Direct Unit The Wall Street Journal, 07/06/01 Regional: Enron in talks with Gulf LNG producers Middle East Economic Digest, 07/06/2001 News Highlights: Chang Hwa Bk 1H Pretax Pft NT$1.46B Dow Jones International News, 07/06/01 Dabhol Project Vexes Foreign Firms --- If Enron's Dispute in India Isn't Resolved, Other Investments Could Suffer --- Regulators and Courts Throw in a New Twist The Asian Wall Street Journal, 07/06/01 Enron May Spin Off Enron Wind Unit This Year, Reuters Reports Bloomberg, 07/06/01 Davis Appeals Order to Release Calif. Power Contracts (Update2) Bloomberg, 07/06/01 NewPower to Acquire Customers From AES and DTE Energy (Update2) Bloomberg, 07/06/01 LME Base Metals:Aluminum Ends Officials Dn On Fresh Sales 07/06/2001 Dow Jones Commodities Service (Copyright © 2001, Dow Jones & Company, Inc.) LONDON -(Dow Jones)- London Metal Exchange three-month aluminum ended officials lower Friday from Thursday's late kerb, on heavy fresh speculator selling in Asian trade and an unexpected stock build, dealers said. (LME three-month prices in dollars a metric ton at officials, with the previous late kerb close in brackets. Comex copper at 1324 GMT in cents a pound, with the previous close in brackets.) Copper 1,562.50 (1,560.00) Tin 4,537.50 (4,535.00) Aluminum 1,449.50 (1,451.50) Zinc 886.25 (884.50) Nickel 5,975.00 (5,962.50) Lead 459.50 (450.50) Comex Sep Copper 70.25 (70.85) The Asian selloff forced aluminum down to a one-year low at $1,434/ton, and after some early forward buying interest in the pre-market in London, the market took a further blow as LME stock movements were released. Aluminum stocks rose 1,450 tons Friday, bringing total stocks to 626,550 tons. "It (the stock increase) was fairly unexpected, but it exposes the slackening demand that has characterized this market for the last six months," said one LME dealer. The move kept aluminum prices depressed for much of the morning, before more forward and bank buying emerged in the first two rings to pull prices off the lows for officials. Aluminum's early falls pulled the already nervous copper market to a two-year low at $1,552/ton, and although the latter's stock rise was much more considerable, it had been expected, dealers said. Copper stocks in LME warehouses have risen by over 50,000 tons in the last two weeks, and a number of dealers are still insistent that another 30,000-40,000 tons will be seen in the coming two weeks. Unconfirmed reports have said major trade house Enron is behind the stock build, in an effort to reduce the market's nearby supply tightness and alleviate the large short positions they are thought to have built up on the July-for-a-week spread. However, the stock builds are only having a limited effect in easing the tightness. "Everyone knows what they (Enron) are up to, and won't lend until they're really hurting," one LME floor dealer said. Spreads were also a focus of the tin market, where prices slumped to an eight-year low at $4,490/ton, after the cash-to-three-month spread reverted to a $25/ton contango Friday morning from a $60/ton backwardation at the beginning of the week. The move was caused by heavy lending of the nearby spreads and rolling forward to September, a tin dealer said. "I think we've seen the last of the tightness for a couple of months," he added. -By David Elliott, Dow Jones Newswires; 44 207 842 9353; david.elliott@dowjones.com ENTERPRISE INTERVIEW: India's salesman to the investing world 07/06/2001 AsiaWeek Copyright (C) 2001; Source: World Reporter (TM) - Asia Intelligence Wire Convincing foreign investors that his country is a good place to do business is a tough sell. But Delhi's finance minister insists that despite a few high-profile setbacks his country offers the world's best returns Indian finance minister Yashwant Sinha has had a roller-coaster year. In February, he delighted foreign investors with a reformist, pro-business budget. But days later, confidence was rocked by a stock market crash and insider trading scandal. Then New Delhi's first major privatization, of the BALCO aluminum plant, sparked a crippling two-month strike by workers. Worse, India's biggest and once most trumpeted foreign investment, Enron Corp's $3-billion Dabhol power project, remains at a standstill following claims the Maharashtra state government defaulted on payments. A U.S.-led $1.6-billion power project near Madras is stalled over financing. Recently, during a road show to Hong Kong and Singapore, Sinha spoke with Executive Editor Richard Hornik, Managing Editor Zoher F. Abdoolcarim and Senior Editor Cesar Bacani. Extracts from their conversation: Can India really compete for investment? We have completely opened up the Indian market. I know that China and other countries have been receiving large foreign direct investments, but let's not forget that they started much earlier on the reform path. The problem is one of perception. We have the challenging task of explaining the new India to the world. Don't you also have the task of explaining it to the Indian people? Isn't there a resentment of foreign companies left over from the colonial era? Every government has pursued the same reform path, including welcoming foreign direct investment. There has [also] been a very marked change from what you referred to as the colonial past. The increasing realization is that it is not Western multinationals that are causing problems. It is competition from other developing countries. There seems to be disquiet among investors, though, about high-profile cases such as Enron and BALC0. BALCO had nothing to do with foreign investment. It was a 100% government company, and we decided to sell 51% along with management control. There was some resistance, but fortunately that has been resolved. In the case of Enron , I have clearly sent out a message to both the Maharashtra government and [Enron] that they had to sit down in the spirit of constructive cooperation and find a solution. Let's not [interpret] a commercial dispute involving one company as being a major disincentive for foreign investment. What are you doing to increase governance in the financial world? I have told Parliament three things: That we shall adopt international best practices so that the scope of mischief is reduced further; that we must strengthen the market regulator; and that we want to corporatize the stock exchanges, which are run by the brokers, so there can be no conflict of interest. In India, can what is manufactured by foreign-owned firms be sold locally? Absolutely. And because of its sheer size, India's middle class of 250-300 million consumers is almost like a middle-sized [developed] country. In terms of purchasing power parity, India is considered to be the world's third largest economy. Another advantage for investors] is that we have a judicial system that does justice to Indians and foreigners alike. But it's slow - very slow. When you say slow, there are courts of appeal from primary courts to the High Court to the Supreme Court. You can't do away with this. You can't compare it with autocratic regimes, where justice can be swift but at times misguided. How is the privatization program faring? In the case of Air India, we decided we'd retain 40%, 10% would go to employees, another 10% would go to the market and 40% would be made available to strategic buyers. Only 26% would go to foreign partners. Similarly we have taken a decision to disinvest [telco] VSNL. We will privatize the domestic airline, Indian Airlines, the largest automobile manufacturer, Maruti, and hotels owned by the Tourism Development Corp. What are your main frustrations? Foreign investors have all kinds of perceptions that India is not worth doing business with, [but] studies by independent consultants A.T. Kearney and the Indian Chamber of Commerce and Industry show foreign direct investors have made more profits in India than anywhere else in the world and most are bullish about the future. Now this is something that is not known. India: Dabhol delay: RCF turns to BG 07/06/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire BANGALORE, July 5. FACED with delays in gas availability from Enron's Dabhol regassification plant, the public sector Rashtriya Chemicals and Fertilisers Ltd (RCF), has turned to British Gas (BG) for supply of liquefied natural gas (LNG) to meet its feed stock requirements. Speaking to reporters here today, the RCF Chairman and Managing Director, Mr D.K. Verma, said that RCF's requirement of LNG was about 1.5 million tonnes per annum. As per the agreement with Enron, the LNG supply was expected to have begun from Dabhol to its Thal plant in Maharashtra. Enron's requirement for power generation was only about 2.5 million tonnes and the remaining was expected to be sold to third parties which included RCF. However, he said, these supplies were faced with uncertainty in view of the stand-off between the Maharashtra State Electricity Board and Enron. Asked if this would lead to a termination of the agreement with Enron, he said: "We still need LNG. When supply from Dabhol is available we will pick it up." In addition to this supply, BG was also expected to supply another 1.7 million from Gujarat to the Trombay plant of RCF. This requirement was in view of the capacity expansion that has been proposed for the urea plant. The capacity of the urea plant is to be raised to 2.3 million tonnes from the current level of 1.5 million tonnes. This expansion is expected to cost at least Rs 1,400 crore, of which Rs 800 crore would be funded from RCF's cash reserves. The debt component is expected to be raised from ICICI. "We are a zero-debt company now and can afford to have a little debt on our balance sheet," he said. The company, he said, was also preparing to expand its DAP (di-ammonium phosphate) capacity in Rajasthan at a cost of Rs 300 crore. This four-lakh tonne per annum plant was being set up with 25 per cent equity support each from Hindustan Zinc Ltd and Rajasthan Mines and Minerals Corporation Ltd. The remaining 50 per cent would be entirely held by RCF itself, he added. Mr Verma indicated that a final decision on the expansion of the urea plant would be taken by the company's board only after the interim fertiliser policy was announced by the Centre. This policy is expected to provide for a pricing policy and prepare the industry for complete dismantling of the retention pricing mechanism. He said that the industry was also looking forward to supplies of LNG from Iran. Supply of gas through the pipeline route via Pakistan would be more cost-effective than the submarine pipeline proposed. - Our Bureau `Reduce government debt by Rs 2000 crore ET Interview / Shalini Singh 07/06/2001 The Economic Times Copyright (C) 2001 The Economic Times; Source: World Reporter (TM) FOR an organisation that has done its best to boost sentiment by repeatedly announcing that it expects the economy to grow by 6.5 to 7 per cent this year, the Confederation of Indian Industries, finds the current official projections of 5.2 per cent way down at the lower end of their own forecast. I believe our projections were realistic considering that on the economic front all the macro-fundamentals are in place. The policies are in place. It is just that the implementation of these policies is not happening. And that is the only reason for a lower growth rate than was envisaged by industry. No. There is no way that can happen. On the other hand, with some hard decisions, we could still move closer to a growth of 6.5 per cent. The most radical would be a dramatic reduction in government debt by Rs 20,000 crore right away. We need to examine what we need to do to achieve this level of reduction and the whole country needs to cooperate in the effort. The whole nation needs to rally around the FM if he makes these moves. We need to move ahead on disinvestment, on reduction in expenditure. What we are additionally prescribing is that issues and policies which have been committed should be implemented. Implementation is going to be the key to success. The CII is preparing to submit, over the next fortnight, a list of 20 projects in housing, power, roads, railways and civil aviation to the government to be monitored on a weekly basis to stimulate growth. Growth can also be stimulated by increased government spending on creating world class capitals for the three new states Uttaranchal, Jharkhand and Chhatisgarh. With an expenditure of just Rs 10-15,000 crore, the government can stimulate demand in cement, power, roads and infrastructure. The funds are there. It is just that there is no thought or planning in this direction yet. The third thing that we are prescribing is that interest rates must come down. I disagree with the RBIs stand on interest rates. Like in the US, we too must respond quickly and proactively to the slowdown. Fourthly, we have an overvalued exchange rate and we believe it is time we moved to a realistic exchange rate. We are just about to see the first effects of an overvalued rupee on the growth rate of exports and we need to arrest this declining rate of export growth. On the contrary, there is recognition and respect for the government that despite a global slowdown, India is still the second fastest growing economy after China. Any disappointment that is voiced is actually in the spirit of moving to better performance rather than a critique of the establishment. I truly believe we are today at the threshold of a unique opportunity. Different countries the US, EU, Malaysia and so on want to engage in trade with India in a manner that nobody has looked at before. President Bush and the Bush administration want to engage in a substantial trade relationship with India which is based on mutually beneficial long-term relationships. It offers India a unique window. There is huge respect for Mr Vajpayee, Mr Jaswant Singh and Mr Yashwant Sinha. The world is recognising Indias potential. Enron is an issue in the minds of the Americans that is stalling investment commitment, despite this respect, and this must be addressed quickly if we are to maximise on our overseas business dialogue. RCF plans to ink supply pact with British Gas Our Bureau Bangalore 07/06/2001 Business Standard 4 Copyright © Business Standard Rashtriya Chemicals & Fertilisers Ltd (RCF) is planning to sign an agreement with British Gas for supply of gas to meet its fleet stock needs. RCF chairman and managing director D K Verma told newspersons that the company's requirement of LNG was about 1.5 million tonne per annum. As per its existing agreement with Enron, LNG supply should have already began from Dabhol to its Thal plant in Maharashtra. Enron's requirement for power generation was only about 2./5 million tonne and the remaining was to be sold to third parties including RCF. The RCF, CMD said that these supplies now faced an uncertain future, because of the stand-off between MSEB and Enron. Asked if it would lead to a termination of the agreement with Enron, he said "We still need LNG. If supply is available from Dabhol we will pick it up," he said in reaction to a question on whether it would lead to a termination of RCF's agreement with Enron. In addition to this supply, British Gas is also expected to supply another 1.7 million tonne to the Trombay plant of RCF. This requirement was in view of the capacity expansion that has been proposed for the urea plant of RCF. "The capacity of the urea plant is to be raised from 2.3 million tonne from the production level of 1.5 million tonne." This expansion is expected to cost at least Rs 1,400 crore, of which Rs 800 crore would be funded from RCF's cash reserves, he said. The debt component is expected to be raised from ICICI. The company he said was also preparing to expand DAP in Rajasthan for Rs 300 crore. This 4 lakh tonne per annum plant was being set up with 25 per cent equity support each from Hindustan Zinc and the Rajasthan Mines and Minerals Corporation. The remaining 50 per cent would be held by RCF itself. Verma also said that the final decision of the expansion of the urea plant would be taken by the board of the company only after the interim fertiliser policy announcement to be announced by the Centre. The policy is expected to provide an interim measure of fertiliser pricing and prepare the industry for complete dismantling of the retention pricing mechanism. Business Economics fuels power solution in California Price relief gains political support Robert Gibbons, BridgeNews 07/06/2001 Chicago Tribune North Sports Final ; N 3 (Copyright 2001 by the Chicago Tribune) Political pressure coming from the U.S. Congress and politicians from Western states seems to have influenced the approach to the power crisis, despite opposition to price caps in the Bush administration. The Federal Energy Regulatory Commission in June expanded price mitigation measures on wholesale electricity sales in California during periods when blackouts are possible. The measures encourage generators to sell power into the state to prevent emergency alerts from being declared, which trigger price caps. The move came with support growing in Congress, especially among representatives of Western states on both sides of the aisle, for legislation that would have capped wholesale prices in the region. The macroeconomic force may have been the difference between the $7 billion cost of power for California in 1999 and its rise to approximately $27 billion in 2000. The cost is estimated to reach between $50 billion and $70 billion in 2001. With that kind of money at stake, suddenly the concern becomes less a question of who is responsible for the problem, but rather, how it can be solved quickly to prevent harsh political consequences. California Atty. Gen. Bill Lockyer has conducted an investigation into the actions of power generators and offered multimillion dollar rewards to whistleblowers to provide evidence of price manipulation by independent power generators. The state is seeking refunds of $8.9 billion, the amount it estimates independent power generators overcharged California's troubled utilities. The U.S. General Accounting Office has released a report criticizing the FERC for not finding evidence of power generators using plant outages to drive up prices in California. "FERC's [February] study was not thorough enough to support its overall conclusion that audited companies were not physically withholding electricity supply to influence prices," the GAO found. Of the major independent power generators and marketers, like Reliant Energy, Dynegy, Duke Energy and Enron, only Williams and its CEO Keith Bailey came out in April in favor of some sort of short- term price relief for California. "The political dynamic out there is much more Draconian than what we're proposing," Bailey told analysts in April, defending Williams' position supporting some limited, short-term price mitigation. What he was worried about was California Gov. Gray Davis using eminent domain powers to take over power plants and the state setting up a public power authority to build state-owned plants. Business/Financial Desk; Section C COMPANY NEWS ENERGY PROVIDER IS PLANNING TWO ACQUISITIONS Reuters 07/06/2001 The New York Times Page 4, Column 1 c. 2001 New York Times Company The New Power Company, a national energy provider partly owned by Enron, said yesterday that it planned to make two acquisitions that would increase its customer base by about 20 percent and increase its presence in Pennsylvania and Ohio. Terms of the agreements, with AES Direct, the retail marketing subsidiary of the AES Corporation, and with CoEnergy, a unit of MDTE Energy, were not disclosed. New Power, of Purchase, N.Y., a unit of NewPower Holdings, said the deals would add more than 82,000 natural gas and electric customers in Ohio, and about 38,000 natural gas customers in Pennsylvania. Business Brief -- NewPower Holdings Inc.: Division to Acquire Assets Of AES's Power Direct Unit 07/06/2001 The Wall Street Journal A4 (Copyright © 2001, Dow Jones & Company, Inc.) NewPower Holdings Inc.'s New Power Co. unit agreed to acquire assets from AES Corp.'s AES Power Direct retail-marketing unit. Terms weren't disclosed. Under the agreement, New Power, Purchase, N.Y., will acquire natural-gas inventory, supply and transportation contracts and infrastructure in Peoria, Ill., and Toronto. AES Power is based in McLean, Va. New Power, which provides electricity and natural gas to households and small businesses in the deregulated energy marketplace, also agreed to acquire, for a sum that wasn't disclosed, the natural-gas inventory related to the Columbia Gas of Ohio and Dominion East Ohio gas customer choice programs of Coenergy Trading Co. Coenergy is a unit of DTE Energy Co., of Detroit. The deals will expand NewPower's presence in Ohio and Pennsylvania, adding more than 82,000 natural-gas and electricity customers in Ohio and 38,000 natural-gas customers in Pennsylvania. In 4 p.m. New York Stock Exchange composite trading NewPower shares rose eight cents to $8.83, and AES stock fell 93 cents to $42.07. Regional: Enron in talks with Gulf LNG producers 07/06/2001 Middle East Economic Digest Copyright (C) 2001 Middle East Economic Digest; Source: World Reporter (TM) The US' Enron Corporation is in talks with Abu Dhabi Gas Liquefaction Company (Adgas), Qatar's Ras Laffan Liquefied Natural Gas Company (RasGas) and Oman LNG Company to finalise short-term spot agreements for liquefied natural gas (LNG). "The target markets are the East Coast of the US and Europe," says an industry official. "Deliveries are presently being made to the US under an agreement with Oman LNG." Enron signed a master agreement with Oman LNG in mid-2000 for the export of six 87,000-cubic-metre cargoes. The US energy firm has already taken two cargoes under the deal (MEED 22:6:01). "Enron is looking to increase the off-take from Oman," the official says. The US energy firm has been in talks with RasGas since 1997 for a short-term spot sales and purchase agreement. Enron will use an 87,000-cubic-metre LNG carrier, Hoegh Galleon, that its owns and operates, for shipments of LNG after it finalises the deals with the three Gulf LNG producers. Two new LNG carriers, each of 138,000 cubic metres in capacity, will enter into service by the summer of 2002 and will trade from the Gulf to the US and Europe. By the end of 2001, Enron will take delivery of Laxmi, at present under construction in South Korea. The vessel is owned jointly by Japan's Mitsui OSK Line, Shipping Corporation of India and Enron. In July 2002, the second new carrier, Excalibur, will join Enron's LNG fleet. Gulf LNG producers are also monitoring a plan by the US' CMS Energy to double the capacity of its LNG terminal at Lake Charles in Louisiana. "The demand for LNG in the southern American market is projected to increase, as CMS plans to build two new LNG terminals on the east and west coasts of Mexico," says the industry official. CMS has signed agreements for 10 cargoes of Qatari LNG. Three cargoes were scheduled for delivery from Qatar Liquefied Gas Company and the remaining seven from RasGas. CMS has been a regular purchaser of spot LNG cargoes from Qatar over the past three years (MEED 19:5:00). News Highlights: Chang Hwa Bk 1H Pretax Pft NT$1.46B 07/06/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) Top Of The Hour Taiwan's Chang Hwa Bk 1H Pretax Pft NT$1.46B Vs NT$1.99B<Q.CHW S Korea Kyongnam Bank 1H Net KRW42.2B; Preliminary Data<Q.KYO Indonesia BCA Shr Offer Already Oversubscribed - Sources< P<PCA S Korea's Kumho Denies Report On Plan To Sell Tire Unit<Q.KHO Top Of The Day WorldCom Ups Year Revenue Growth View; Cuts Year Group Cash EPS View <WCOM Alcatel Cuts Bid For Lucent's Optics To $3 Billion - Report <ALA Advanced Micro Devices 2Q Sales Fell 17%; Sees 2Q Net 3c-5c/Shr <AMD NZ Fletcher Forests: In Talks With Cos On Forestry JV Sale<FFS Taiwan's Hua Nan Bk 1H Pretax Pft Dn 22.9% At NT$2.34B<Q.HNC Auckland Airport Surprised By Report, To Make Strong Case<A.AIA Toyota Motor Consolidates Distribution In Europe - Nikkei<TM Coca-Cola Amatil: Reaches Pact With South Korea Unions<A.KOA Japan PM Koizumi: Should Abolish State-Run Oil Corp<R/JA Indonesia Indofood's Golden Agri Deal Stalled - Report<P.ISM Tropical Storm Hits China; HK Mkts Unable To Open On Time<R/HK Market Reports WSJ.COM: Asian Stocks Down Early, Pft Warnings, Nasdaq<R/ASI Nikkei Stock Average At Midday 12355.96, -251.34<R/JA Malaysia Shrs Up 3.0% Early On Foreign Buying<R/MY World Forex: Dollar Gains Across The Board<M/USD NY Stocks Fall Back, As Marconi Warning Reverberates<N/NYS Special Reports Asian Stock Focus: Weak Exports, Politics Hurt China Air<Q.CAI ASIA DEBT: PCCW-HKT Jumps On The Road Ahead Of The Crowd<PCW Hitachi Halts Cellphone Chip Plant As IT Demand Withers<J.FUT Heard In Hong Kong: Correlation Between Markets In Asia<R/ASI APP Worrying Creditors; Significantly Fewer Asset Sales<PAP Enron's India Problems Threaten Other Foreign Investment<ENE (Category codes may vary, depending on your vendor. Numbers in brackets refer to page numbers of stories for Bridge/Telerate subscribers using the pages application.) Asian-Pacific News Dabhol Project Vexes Foreign Firms --- If Enron's Dispute in India Isn't Resolved, Other Investments Could Suffer --- Regulators and Courts Throw in a New Twist By Daniel Pearl Staff Reporter 07/06/2001 The Asian Wall Street Journal 3 (Copyright © 2001, Dow Jones & Company, Inc.) BOMBAY -- Once touted as a beacon for attracting foreign investment to India, Enron Corp.'s $3 billion Dabhol Power Co. project has turned into a nuisance for some foreign companies doing business in the country. Behind the scenes, some of them are now maneuvering to help resolve a dispute between Dabhol and the Indian state of Maharashtra that is at the core of the project's problems. The largest-ever foreign investment in India, Dabhol is mired in conflict. Maharashtra, Dabhol's only customer, has stopped purchasing power from the 740-megawatt project, saying its rates are too high. Work has stopped on a nearly completed second phase of the project slated to generate 1,444 megawatts. Enron, which controls 65% of the project, has tried unsuccessfully to scale back its stake and may be looking to exit entirely. In an effort to get the electricity project back on track, some of the project's foreign lenders -- including ABN Amro, Bank of America Corp. and Credit Suisse First Boston -- sent representatives to a recent meeting here with Maharashtra's electricity board. Dabhol's difficulties are making lenders wary about funding other power projects in the country, and could make states bolder about seeking new contract terms. That has left other power companies increasingly nervous about Dabhol. Some have signaled they could be interested in taking over the project if its contract problems can be settled. Dabhol participants still aren't sure if the interest is sincere or is an attempt by the other companies to prevent collateral damage to their own projects. India's Reliance Industries Ltd., which, in partnership with Southern Co. of Atlanta, is hoping to build a big plant in eastern India, doesn't deny media speculation that it is interested in Dabhol. Nor does Arlington, Virginia-based AES Corp., whose generating company has had disputes with India's Orissa state. Prakash Daryani, managing director for Houston-based El Paso Corp.'s Indian power unit, says that if the Dabhol contract isn't resolved in a way that makes both the utility and Maharashtra happy, "it will have an adverse impact" on other investments, and "El Paso will not be an exception." He denies reports that El Paso, which helped build a 340-megawatt plant in Southern India, has expressed interest in buying Dabhol, but adds: "We are keeping our eyes and ears open." Some companies may be doing more than that. Patrick Sonti, a New Delhi-based energy consultant, said he had helped draft a plan outlining a way out of the Dabhol impasse, with price concessions on both sides and financial separation of Enron's liquefied-natural gas terminal from the power plant. Mr. Sonti says he studied Dabhol for a client whose name he can't disclose. Mr. Sonti also chairs an American Chamber of Commerce committee on energy, and he acknowledges discussing his Dabhol plan with some of the panel's members. He says the Chamber wouldn't intervene unless asked by Enron. Last time the project ran into trouble with the state, Enron executives saved it through an intensive lobbying campaign, aided by American officials. Next week, the company's chairman, Kenneth Lay, is expected to fly to India, though Enron won't comment on whom he intends to visit. Even though Enron and Maharashtra officials have met regularly, their dispute has fallen into a slow-motion stalemate, with Enron saying it hasn't agreed to renegotiate the contract and the state insisting it has already rescinded the contract. Despite warnings that construction delays will increase the project's cost by up to $400 million, Vinay Bansal, chairman of the electricity board, said Monday that getting the project's second phase running is "not a priority for us," since the state can't afford the power. The Dabhol contract requires the state to pay for most of the plant's generating capacity regardless of how much power it consumes. Maharashtra's consumption has been far below projections. Mr. Bansal wants India's central government to help buy excess power from Dabhol, but "they keep saying no." Other states would be willing to buy power if the rates could be lowered to 2.50 rupees (5.3 cents) a unit, but that's still well below Dabhol officials' most optimistic projection. Meanwhile, India's regulators and courts are throwing in new twists. The Maharashtra Electricity Regulatory Commission, set up as an independent body to regulate electricity rates, is seeking jurisdiction over the Dabhol dispute, even though the commission was created after the Dabhol contract was signed. Enron wants an arbitration panel to decide instead. A Bombay judge issued a ruling last week that is likely to send the jurisdiction battle to India's Supreme Court. If Enron loses that battle, it is likely to lose more time. "We'll make the process totally transparent," the chairman of the Maharashtra Electricity Regulatory Commission, P. Subramanyam, promised in an interview earlier this year. But if Dabhol construction doesn't resume by summer's end, Enron's suppliers of liquefied natural gas are likely to get nervous. Dabhol has 20-year contracts requiring it to buy liquefied natural gas from Abu Dhabi and Oman starting next year. As for the lenders, Indian banks have more to lose than foreign banks if Dabhol, starved of revenue, continues to miss payments. That is because much of the foreign debt is guaranteed by the Indian banks, led by state-controlled Industrial Development Bank of India. For the project's second phase, foreign debt totals nearly $1.1 billion, and domestic debt about $330 million. Lenders haven't yet agreed to inject more funds to allow construction to resume. "I don't think there is any division among lenders at the moment as to what should be done," says an international lender involved in the talks. "But this is not an easy workout, having so many parties involved in so many parts of the world." Enron May Spin Off Enron Wind Unit This Year, Reuters Reports 2001-07-06 07:18 (New York) Copenhagen, July 6 (Bloomberg) -- Enron Corp. may spin off its wind-power unit Enron Wind as early as this year, Reuters reported, citing comments made by Enron Wind managing director Andreas Reuter on Wednesday. The unit most likely would be taken over by an investor and then shares sold in an initial public stock offering, Reuters reported, citing comments Reuter made on the sidelines of a European Wind Energy Conference and exhibition in Copenhagen. Enron Wind is concentrating its expansion plans on France, Ireland and the Netherlands, Reuter said. Enron Wind currently produces power in Germany and Spain and would consider moving to the U.K. as well if that market ``starts moving,'' Reuters reported, citing Reuter. (Reuters 7-6 Interactive) For the Web site of Reuters, see {RNEW <GO<}. --Geoffrey Smith in the Princeton newsroom (609) 279-4028, or gsmith15@bloomberg.net/bk Story illustration: To chart Enron's share price, see {ENE US <Equity< GP <GO<}. Davis Appeals Order to Release Calif. Power Contracts (Update2) 2001-07-05 17:31 (New York) Davis Appeals Order to Release Calif. Power Contracts (Update2) (Adds details on filing of governor's appeal.) San Diego, July 5 (Bloomberg) -- California Governor Gray Davis has appealed a state judge's order to release records of how much the state spent purchasing power on the spot market. San Diego Superior Court Judge Linda Quinn ruled last week that the governor had to produce spot market invoices, purchase orders and confirmation sheets for power supply contracts signed from January 1 through June 27. Quinn directed Davis to produce the documents by July 16, but she temporarily suspended her order today to allow a state appeals court to consider the governor's appeal, which was filed Tuesday. Several media organizations and Republican state legislators sued in March under California's public records law to obtain the contracts, arguing that the state used billions in taxpayer money to buy power. ``There's an obvious and manifest public interest in disclosure of these contracts,'' said Alonzo Wickers, a lawyer representing the media companies, at a hearing last week. Davis countered that disclosure would hurt the state's bargaining position with generators and force it to pay higher prices. Media companies had also sought disclosure of 38 uncensored long-term contracts to buy $43 billion in electricity. State Controller Kathleen Connell released those contracts on Monday. Connell, a fellow Democrat, has criticized the governor for keeping the contracts secret. She also released terms of consulting contracts the state made with investment advisers and energy traders. Power Purchases The state has spent about $7.4 billion buying electricity for three investor-owned utilities. The state's Department of Water Resources now buys about one-third of the power used by the state's two largest utilities, PG&E Corp.'s Pacific Gas & Electric and Edison International's Southern California Edison. Pacific Gas declared bankruptcy in April. Legislators and consumer groups have criticized Davis, saying the state is locking itself into expensive long-term contracts that would force it to pay higher rates for electricity in future years. Those seeking access to the long-term and spot-market contract information include Copley Press Inc., Tribune Co.'s Los Angeles Times and Bloomberg LP's Bloomberg News. State Assemblyman Tony Strickland, joined by 10 fellow Republican Assembly members, filed a similar suit in March. --Joyzelle Davis in Los Angeles (213) 617-0582, or joydavis@Bloomberg.net, with reporting by David Ward in San Francisco (415) 912-2995, through the Washington newsroom /ta Story illustration: To see a graph of the Bloomberg PowerMatch Trading Index of Northern California power prices: {PMATNPSP <Index< GP D <GO<}. NewPower to Acquire Customers From AES and DTE Energy (Update2) 2001-07-05 16:10 (New York) NewPower to Acquire Customers From AES and DTE Energy (Update2) (Adds closing share prices in last paragraph.) Purchase, New York, July 5 (Bloomberg) -- NewPower Holdings Inc., a venture formed last year by Enron Corp., agreed to acquire customers and assets from subsidiaries of AES Corp. and DTE Energy Co. to expand in Ohio and Pennsylvania. NewPower, which sells electricity and natural gas to homes and small businesses, will buy customers and assets such as natural-gas inventory and supply contracts from AES Power Direct and DTE's CoEnergy unit. Financial terms won't be disclosed, NewPower spokeswoman Terri Cohen said. The acquisitions will add 82,000 customers in Ohio and more than 38,000 customers in Pennsylvania for NewPower. The company, which had an initial stock sale in October, competes for energy sales in Pennsylvania, Texas and other states. NewPower, based in Purchase, New York, has more than 630,000 customers in 10 states and expects to have 1.2 million customers by the end of the year. Houston-based Enron, the largest energy trader, owns about 23 percent of NewPower. Shares of NewPower rose 8 cents to $8.83. They have fallen 58 percent since the initial offering. AES, based in Arlington, Virginia, fell 93 cents to $42.07. Detroit-based DTE rose 18 cents to $46.68. --Mark Johnson in the Princeton newsroom, (609) 279-4017 or mjohnson7@bloomberg.net/slb/cmm/kak Story Illustration: For NewPower's stock performance for the past year with its comparable indexes, see {NPW US <Equity< COMP D <GO<}. For more energy news, see {TOP NRG <GO<}.
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