Chapter 468: Default

India was in severe shortage of electricity in the 1990s. In order to encourage capital to enter the electricity market, the government allowed foreign capital to hold 100% of the shares.

The Dabhol Power Company, invested by Enron, was born in this context.

The project started negotiations as early as 1983, was signed in 1995, and was put into use in 1999.

As a result, in less than two years, the Dabhol Power Company, which invested $3 billion, has found itself in a difficult situation.

When the agreement was signed, Enron and the Mauritanian government agreed that the latter would purchase electricity from the Dabhol Power Plant at a price of 10 cents.

The agreement also contains a supplementary clause on the minimum amount of electricity to be purchased, which means that even if there is no power shortage, the Mabang Power Company must purchase sufficient electricity from Dabol.

Looking at the entire contract, most of the terms were very favorable to Enron.

To ensure the successful operation of the project, the Indian government also provided a counter-guarantee for the contract.

For example, when the Maharashtra Power Company is unable to implement the terms of the contract, the Indian government will provide a guarantee.

It can be seen how scarce the electricity resources were in India at that time, and the government almost gave extremely preferential policies.

However, in the power sales agreement, the unit of measurement is US dollars.

That is, no matter how the rupee exchange rate changes, the purchase price of the Maharashtra government is 10 cents per kilowatt-hour of electricity.

Five years ago, 10 cents was worth 2.7 rupees, but today it is 4.5 rupees.

Here is the problem, the rupee has been depreciating.

Five years ago, the Maharashtra Power Company purchased electricity at a purchase price of 2.7 rupees, which was a profit.

Five years later, when it was purchased at Rs 4.5, not only was there no profit, but there was also a loss.

With the entry of Sur, Reliance and Adani Group into the electricity market, the domestic electricity price in India has long dropped to around 3 rupees.

The electricity that Mabon Power Company bought at 10 cents can only be sold at a loss, and the more it sells, the greater the loss.

In just two years, the state-owned company lost $10 billion, and everyone was shocked by the figure.

There is no doubt that given the character of Indians, even a state-owned company would not be the one to be taken advantage of.

Mabon Power refused to pay and asked Dabhol to cut their purchase price.

The head office Anran disagreed and demanded that Mabang Power Company abide by the spirit of the contract and repay the debt.

This group of Western capitals has taken over the Mabon Power Company because that was the original stipulation in the contract.

Moreover, Enron's situation in Europe was not very good, with many internal problems, and it urgently needed a large amount of funds to recover.

How could they give up this piece of fat? Now that the Maharashtra government is playing tough, they will go to the Delhi government.

Who made them provide the counter-guarantee in the first place? As the highest authority in the entire country, Delhi cannot go back on its word.

Ron, who learned the news, called New Delhi immediately.

"Don't pay any attention to them! These vampires had evil intentions from the beginning!"

"Those idiots in the Congress Party only knew how to sign contracts, but never thought of this day."

"So why should we take the blame for this mistake? That's their problem!" Ron fanned the flames from behind.

"New Delhi hasn't responded to Enron yet, but I doubt they'll let it go."

"So what? This is India."

“You mean,” Vajpayee drawled.

"I feel that Enron had ulterior motives and was harming India's interests."

"You're right, this is a matter of sovereignty!"

In just a moment, both sides understood each other's thoughts.

Default on debt!

This is a good excuse, the question is about sovereignty.

"But this matter will have to be dealt with sooner or later. Bring your phone with you."

"How can we hand over India's energy market to outsiders? Sur Power is a very good company. I guarantee that we will have a pleasant cooperation with Maharashtra."

“That might take some time,” Vajpayee reminded him.

"It doesn't matter. They won't be able to delay for too long. Enron is in trouble now."

"Well, they'll never get past New Delhi."

"Long live India!" Ron shouted with great emotion.

In just a few words, the fate of this power company with a $3 billion investment was sealed.

As early as the initial construction, the Indian Party came to power in a hurry and suspended the project on the grounds of "corruption" and "harming national interests", causing the project to stagnate for nearly a year.

Although the project was later restarted, it also caused Enron to lose nearly $500 million.

The BJP betrayed Enron once, and now it is doing the same thing again without any psychological burden.

As for Ron, he is just a qualified Indian.

How could he take over Enron's huge assets without destroying it?

When Dabol Power Company was designed, its total generating capacity exceeded 2,000 megawatts, almost five or six times that of the current Sur Power.

It's too tempting. Once it is swallowed, Sur Power will become the largest private power company in India.

Of course, after getting the benefits, they must share part of the profits with the government. This is the tacit understanding between the two parties.

This is how big Indian groups have grown, such as Tata and Reliance. Which one has not swallowed up foreign companies?

Ron is acting purely in accordance with Indian values, and that is bringing glory to the country!

After private negotiations, New Delhi no longer paid attention to Enron's compensation claims.

As expected, the other party did not give up and simply filed a lawsuit against the Indian government in the London court.

Of course, Britain protected its own people and quickly held a court hearing to order the Indian government to fulfill the contract.

As a result, New Delhi ignored them and simply refused to comply with the ruling on the grounds of "sovereign immunity".

The so-called sovereign immunity is a polite way of saying "default on a debt."

When Enron's plan failed, he turned to the US government for pressure, but New Delhi remained indifferent.

It is true that India is backward, but it is also a sovereign country.

When it comes to national self-confidence, Bharatiya Janata Party is hard to beat.

The BJP doesn't take the paper tiger seriously at all. Do you want to attack India for a power company?

This was destined to be a bad debt, and Enron had no way to deal with the Indian government.

Ron has been secretly asking people to take inventory of the assets of Dabol Power Company to facilitate future actions.

At the same time, Rana, who had traveled around South Africa and Brazil, also brought good news. He had found a large iron ore mine and coal field.

Now we just have to wait for Ron to send a team of experts to conduct an investigation. As long as the details are determined, both parties can start the business.

Electricity, steel, coal, Suer has finally taken a big step forward in the traditional industrial field.

As long as things go well, even if globalization has an impact on Sur Electric, it will not affect his wealth status.

While Ron was waiting for an opportunity to acquire Daboer Power Company, he was also worried about another thing.

A major earthquake struck Gujarat at the beginning of the year, directly killing 20,000 to 30,000 people.

This number is very scary, but it is understandable considering the quality of Indian houses.

Nearly 170,000 people were injured, 27,000 of them seriously injured. This means the death toll will double, potentially exceeding 60,000.

The town of Bhuj, near the epicenter, was almost completely razed to the ground, more than a million houses were destroyed, and millions of people were displaced.

Unfortunately, Adani's Mundra Port is near the epicenter, and the refinery and other facilities in the port suffered heavy losses.

The Jamnagar Port, across the bay, was also affected.

Although not as severe as the Mundra Port, it also suffered losses.

The Sur park built there was forced to shut down for three months and much of the equipment needed to be recalibrated.

Fortunately, only a few hundred people were injured and the death toll did not exceed one hundred, so it did not cause too much chaos.

When the park was first built, Ron did not cut corners, and the building's earthquake resistance is no less than that of the state government.

Although the losses have been minimized, there will still be losses of tens of billions of rupees.

Ron did not have the ability to predict the future, and he did not know that a major earthquake would occur in Gujarat.

In order to avoid being caught off guard next time such a disaster occurs, he has been inspecting the construction quality of each branch factory.

We don't ask for 100% protection against all kinds of disasters, as long as we are not too bad.

In September, another major event happened that attracted the attention of the whole world.

The images of the planes crashing into the Twin Towers were broadcast around the world, and for the first time people had a full understanding of the damage caused by terrorist attacks.

The organization that planned this case was wanted worldwide, and Baba Yang was also involved. There were rumors that he supported this organization.

Although the North vehemently denied it, the various forces hiding in its territory were in constant fear.

The first to be hit was Dawood, who had a criminal record.

He has funded separatist pastoralist forces more than once and was caught by the United States.

Perhaps influenced by the 9/11 incident, the US officials directly announced the latest news that Dawood was hiding in Karachi and the passport number of his Baba Sheep.

The leaders of the Daud gang lived a precarious life. They were frightened and wary of each other, fearing infighting or assassination by Rajan's men.

They are also afraid that their host, Baba Yang, will execute them secretly or hand them over to the Indian government as a diplomatic means for Pakistan to show goodwill.

They were so good at exploiting fear that they made a living by creating panic to force their targets, who were desperate to stay alive, to pay ransoms of millions of rupees.

Now, this panic has finally backfired on them, chasing them day and night, and the fight will never end.

The young Rajan gang jumped up and down, seeing a golden opportunity to eliminate their mortal enemy in one fell swoop.

Then, in September, Shakir struck first. His men stormed a Bangkok mansion and shot Rajan Jr., who was attending a dinner party, killing him.

As the mob broke into the house and started killing people, they did not forget to keep their mobile phones open. Shakir, who was in Karachi, was able to listen to the wailing of the traitor Rajan, as if it was the most beautiful music in the world.

But just like in Indian gangster movies, little Rajan, who was not destined to die, jumped off the balcony and fled overnight despite the severe pain caused by his broken legs.

It is said that he was last seen in Luxembourg, still controlling his remaining forces in Mumbai by phone.

Salem, who ordered the assassination of Chopra and threatened Sanjay Dutt not to leave the country, was arrested in Lisbon and is awaiting extradition.

When Salem was arrested, he was accompanied by a Bollywood actress. This guy was still obsessed with the entertainment industry even when he was about to die.

Ron ate some melons and then packed his luggage to fly to Bangalore.

The special economic zone he has there is already in operation.

That was Sur Real Estate's largest investment to date, and he had to go and see it.

(End of this chapter)