Enron men in Satyam Group

Source: The Economic Times (New Delhi, India) (via Knight Ridder/Tribune Business News)
Publication Date: 18-JUL-05

Enron men shed their garbs, but power ahead.

Byline: Anto T Joseph

Jul. 18--MUMBAI, India -- Enron may be a bad word in the US, but it's definitely not so in India. At least not for the old guard at Enron India and its subsidiary, the ill-fated Dabhol Power Company (DPC). They still have those memories about India's largest power plant that was set up in the picturesque Dabhol village in Ratnagiri district, which entered the history books for creating a long and complex legal battle between the promoters and the lenders -- foreign and Indian.

Most of the former top officials of Enron India and DPC have moved to other Indian power companies, while a few moved back to their home country, the US. Despite the nostalgia, many do not mention the word 'Enron' in their CVs.

"Give us credit for what we have created. The 2,184-mega watt power project, when India was on the verge of a power crisis, a regassification plant and an LNG terminal at $3bn was indeed a national asset. It's unfortunate that the project sparked off more controversy, and produced less of electricity," says Vinayat Bapat, former CFO at DPC, currently serving as an independent director in a few companies in Mumbai and Pune.

The high-flying former chief executive of Enron India, Sanjay Bhatnagar, went back to the US, and set up a private fund called THOT Capital in New York. The fund buys out discounted debt in distress sales, and turns it around before selling them. Currently, chairman and CEO of THOT Capital group, Mr Bhatnagar was recently in India to hold discussions with interested parties in India, including ICICI. ET's efforts to reach him proved futile.

Reliance group had recruited two top executives of DPC -- Sanjeev Khandekar and Mukesh Tyagi, both senior vice-presidents of DPC, soon after the collapse of DPC in '01. While Mr Khandekar is still with Reliance Energy, Mr Tyagi has recently moved to Essar Power.

Mohan Gurunath, Enron India's vice-president (finance), had moved to Tata Power, and was heading its business development department, till '04-end. In January, he joined Hyderabad-based Maytas Infra Ltd, an arm of the Satyam Group, as its chief executive officer.

While there is a concerted effort to bring the Dabhol project back on stream, at least some former employees are guarded in their optimism. "The scenario is not too much different now. There are a lot of government guarantees. There will be a take-or-pay gas deal, while gas linkage is yet to happen. The lenders have lost cash inflows from the plant for four years. The only saving grace is that the unit cost will look less, since the plant will be operated at base load," said a former employee.

"The state government was caught napping for 4-5 years, when the DPC controversy was raging. They have not even set up one MW power plant," says another official.

Others say it's a great asset. "If Gail takes the LNG regassification plant, it would overnight turn into another Petronet LNG. At Dabhol, Gail can sell 2.1m tonne of LNG to DPC, and another 2.9m tonne through merchant sale," said another official.

"It's a great feeling that the power plant is coming back on stream. Hope it doesn't generate any controversy this time around," said Mr Tyagi.

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Copyright (c) 2005, The Economic Times, India