In its deposition before the Madhav Godbole energy review committee, EVA convenor Pradyumna Kaul alleged that the Enron business model had miserably failed. He said that the entire capital of the Dabhol Power Company (DPC) needed to be restructured and treated like a failed business model.

"Therefore, capital market strategies for dealing with failed businesses as in the cases of Board for Industrial and Financial Reconstruction (BIFR) need to be adopted here and this will involve the restructuring of equity by writing down the share capital by a factor of 10 to compensate the extent of overinvoicing," Mr Kaul told The Financial Express. He added that such a method had been adopted in the case of the steel industry by financial institutions when defaults had occurred and earnings shrunk.

Mr Kaul strongly opposed the DPC's proposal for sale of power to a third party on the grounds that all of MSEB's high-paying consumers would be taken over by the DPC in a short span of three to four years. The MSEB would thus be left with "countryside consumers who can't afford the price" to cater to and it woulld render MSEB sick.

Mr Kaul reiterated the EVA opposition to the appointment of Dr Kirit Parikh and director of Tata Energy Research Institute RK Pachauri on the Godbole committee and demanded that the duo be asked not to participate in the proceedings. However, Dr Godbole is believed to have expressed his inability to comment on these objections on the ground that it falls in the jurisdiction of the state government.

Incidentally, Dr Parikh and Mr Pachauri were absent at Monday's hearing while it was attended by Housing Development Finance Corporation chairman Deepak Parekh, former union energy secretary EAS Sarma, member-secretary Vinay Mohan Lal and a battery of MSEB officials.

Meanwhile, former Indira Gandhi Centre for Atomic Research director SR Paranjape in his deposition before the committee strongly called for the scrapping of the power purchase agreement between the MSEB and DPC for the Dabhol project. He alleged that the project was ``based on fraud and corruption''.

Mr Paranjape also opposed the Maharashtra government's appeal to the Centre to share the financial burden arising out of the project and said it would not alter the burden on the national economy as a whole.