Notes

1. The first figure -- $1.52 billion -- is derived as follows:

A 2184 MW plant at 90 per cent capacity utilisation is capable of generating 17.28 billion units at the price of US $0.088 per unit (Rs 4.13), which is the price assuming oil at US $28 a barrel.

Alternatively: assuming oil at, say, $20, the price per unit is of the order of $ 0.81( 8.1 cents) or so; that is, total payments would be of the order of $1.4 billion.

2. Historically, the rupee has got devalued/depreciated at the rate of 6.5 per cent per year. This pattern has been observed over the last 50 years! The exchange rate in 1965 was Rs 5 ; in 1980, it was Rs 10.

This is the rate used in the second column – of interest is that if the assumption of 5 per cent is used -- that is, a difference of only 1.5 per cent. Over the life of the contract, it makes a difference of Rs 1 trillion! (100,000 = 1 lakh; 10 lakh = 1 million; 1,000 million=1billion; 1,000 billion=1 trillion)

3. The sensitivity of absorption: There is no way that we can absorb base load power. That is, at 90 per cent. This was the main objection of the World Bank, the CEA or even Dr Kirit Parikh (who later changed his mind for "unknown reasons). We have to stop generating cheap coal power (for example: in the night, where even the most ardent proponent of Enron admits that the Enron power is useless). If we take less, say even 60 per cent, the price per unit increases by 50 per cent!
4. The price of oil has been taken to be relatively steady at $ 28. This is the current price and appears to be a reasonable approximation (between $ 24 to $ 32) of the prices over the next 4 to 5 years . However, if there is a sudden increase in prices (as it happened last year), the assumptions take a toss. Needless to add, we will have to pay much more. Additionally, a steady long-term increase cannot be ruled out. To illustrate in dollar terms, oil prices have been steadily increasing at about 3 per cent per year (this is a 40-year trend!) If this assumption were made, we are in deeper trouble.
5. The total payments are with the assumption that all three blocks (of about 700 MW) will be online in January 2002 (as envisaged currently). As of January 2001, it does appear that Enron will try and delay at least one of the three blocks for another year. If that is the case, payments would decrease proportionately.
6. Currently (in the absence of all documentation), it appears that Enron's fuel supplies are limited to 82 per cent of the installed capacity, (2.1 million tones of LNG and the equivalent of 5 per cent capacity on naphtha). If this were indeed the case, the payments would reduce by 2 to 3 per cent in dollar terms.