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Kerala CPI-M denies knowledge about Enron project

D Jose in Thiruvananthapuram

Kerala's Left Democratic Front government, led by the Communist Party of India-Marxist, is trying to wriggle out of the Enron project after the multinational tied up with the Nambiar Group. Power Minister Pinarayi Vijayan denied any knowledge of an agreement signed between K P P Nambiar of Kannur Power Projects Limited and the Indian representative of the Enron Power Energy Corporation for setting up the 513 mw power project at Kannur at a cost of Rs 15 billion.

K P P Nambiar had earlier announced the tie up at Cochin and claimed that the Kerala government, Kerala State Electricity Board and the Central Electricity Authority were officially informed about the agreement. He had also declared that the project had been cleared by all except the Central Electricity Authority and the Cabinet Committee on Foreign Investment.

The attempt to disown the project by Chief Minister E Nayanar and the power minister is seen as a calculated move to appease the party's powerful trade union wing (the Centre for Indian Trade Unions), at least till the elections are over.

The union is against the entry of multinationals in crucial sectors like power. It may be recalled that CITU is a party to the case filed against the Enron project in Maharashtra. In Kerala, opposition leaders as well as some constituents of the Left Democratic Front had expressed reservations over the project.

State Congress President Vyalar Ravi has even alleged kickbacks behind the award of the project to Enron and questioned the capacity of the Nambiar Group to carry out a project of this magnitude. The company's promoter, K P P Nambiar, has spent the better part of his life as a government servant.

The Nambiar Group is supposed to pick up 26 per cent equity, which will roughly amount to Rs 4 billion. However, the group reportedly holds only Rs 50 million. It will be virtually impossible for the company, said Vyalar Ravi, to raise Rs 4 billion.

Sources here said that Enron might have been encouraged to tie up with the Nambiar Group as the latter had secured fuel allocation for the project. However, the Kerala high court has recently quashed the fuel allocation on an appeal filed by Western Investments and Estates Limited and asked the state government to reconsider the applications for fuel allocation.

Sources in Thiruvananthapuram have expressed dismay over the statements by the chief minister and power minister denying knowledge about the tie-up, since the Nambiar Group was allocated the fuel supply after examining all aspects regarding the execution of the project.

It has been learnt that Enron's proposal for a tie-up with the Nambiar Group was discussed by CPI-M leaders at the national level. The top national CPI-M leaders had reportedly assured the multinational full support from the Kerala state leadership.

Incidentally, Enron has also signed a memorandum of understanding with West Bengal government for investment of over a billion dollars. The CPI-M heads the government in West Bengal.

EARLIER REPORT:
Commie Kerala welcomes Enron