SC rejects Maharashtra govt plea to shut Enron probe

The Supreme Court on Thursday declined the Maharashtra government’s plea to close the case of alleged bribing in the Enron-Dabhol power project. It was reported that the then bidders of the project, Enron, had paid money to politicians and bureaucrats to clinch the deal.

A three-judge Bench, led by Chief Justice of India (CJI) Ranjan Gogoi, while turning down the plea moved by the state, asked it to submit by March 13 a plan on how it intended to bring the case to a logical conclusion. The Bench also asked the state to submit details of the steps it had taken so far on the recommendations of a committee that has suggested judicial probe into the power project in 2001.

In 1992, US Energy conglomerate Enron started the process to set up a gas-fired power plant at Dabhol in Maharashtra. Work on the project soon ran into trouble on allegations of corruption and bribery at the highest levels. A new government took charge in Maharashtra in 1995 and on recommendations of a committee scraped the project. Enron then entered into arbitration with the government but came to a new agreement one year later.

Later in 2000, when another government took over, it stopped the payment of $22 million to Enron for December 2000. The state then sought to cancel the power purchase deal, which promoted Enron to stop work on phase-II of the project and sell phase-I.

The Maharashtra government in 2001 had ordered another probe led by Indian Administrative Services (IAS) Officer Madhav Godbole. The committee criticised the renegotiated terms for the power plant and recommended a judicial inquiry to fix administrative and political accountability.

The project was later taken over by Ratnagiri Gas and Power, a consortium of Union government-owned companies — NTPC and GAIL, and the Maharashtra government, in 2005. NTPC had then signed a 25-year power purchase deal, under which, while Maharashtra agreed to buy 95 per cent of Dabhol’s power, Daman & Diu and Dadra Nagar Haveli agreed to buy 2 per cent each. Goa had agreed to buy 1 per cent of power generated from Dabhol power project.