From: john.hardy@enron.com
Cc: rob.walls@enron.com, steven.kean@enron.com
Date: 2001-04-16 16:53:00+00:00
Subject: Dabhol Next Steps - The Politics

Rebecca
 We had a good meeting with OPIC last week.  They are sympathetic to our 
situation and inclined to support the PNT, with certain particular concerns 
stemming from the fact they are a government agency, as I am sure you have 
been briefed.  But an issue they raised - how do we plan to proceed so as to 
get the Indian players to the table as we move to issuance of PNT - is a 
critical one now to ponder as we ratchet up the signals through the legal 
steps we are taking.
 If I might, some thoughts on this process, and I hope they help your 
thinking.

  1.  My conversations with the Embassy last week indicate that they 
understand the message we are sending and are eager to get into a dialogue 
beyond the discussions with Wade about the invocation of the counter 
guarantee for each month's payment.  That is one reason they are eager to set 
up a meeting with Ken for the 27th with the Finance Minister. The Ambassador, 
I think reflecting a view of the Centre, was seeking assurances that we were 
not going to leave the country but remain engaged with them in seeking a 
"typically convoluted Indian solution to the problem" (His words).  I think 
at very senior levels the government does not want to be left having to sort 
out the solution themselves, while also bearing the international political 
ramifications of the departure of a major American investor.
       So I think the Centre wants now to engage with us in a dialogue to 
find a solution.  But I think they do not know quite where we stand at this 
point and whether we want to talk.  The legal steps certainly can point to an 
intent to leave, and I think the Indians now need a signal from us - 
preferably in private.
 2.  The Centre also does not genuinely know how to solve the problem.  So I 
think we need to have ready a proposal that can serve as the basis for 
concrete discussions, and that we not give up a lot in the process.  But we 
need to convey to the Centre that we have concrete ideas for solving the 
problem.
 3.   There needs to be a political communication path between Delhi and 
Houston that parallels the legal/payment communication path Wade is so ably 
handling.  The Centre cannot differentiate the roles Wade is handling so I 
think they undervalue the more political messages.  They are looking for Ken 
and yourself to handle the higher level communications, or an agent directly 
representing you to do so.  Only such a person will be able to meet with the 
Finance Minister at the end of the month.  I understand Prabu is viewed as 
competent technically but not a power within the BJP, so a decision on 
negotiations will not be his.  The critical player at this point is Jashwant 
Singh, the Minister of Foreign Affairs, Defense and now also overseeing the 
Prime Minister's Office.  Sinha, the Finance Minister, will be more reluctant 
to engage on our issue because its politics are not in his realm - except for 
the finance issues.  But the timing of his visit and willingness to meet are 
positive to moving the dialogue forward.      
 4.  The GOM is the real problem.  The Embassy made some interesting comments 
about this issue.  It noted that we had not really called upon the support of 
the USG to date, and then, without directly saying so,  encouraged us to get 
the President and his Administration to weigh in.  The objective, I think, is 
to provide ammunition for the Prime Minister to call Deshmuck in and direct 
him to negotiate in the national interest.  We also need to underscore to the 
Centre that we have a window and that negotiations need to go forward now 
before we get boxed into our respective corners.

I hope this helps. Thanks John