
Date: Thu, 14 Jun 2001 23:20:00 -0700 (PDT)
From: amr.ibrahim@enron.com
To: richard.shapiro@enron.com
Subject: India - Progress Report Two

Rick:
I hope that all is well.  It was very nice to talk to you this morning.

The purpose of this note is to keep you abreast of progress in determining
the GA  needs for India, and seek your opinion for the best reply for Wade.
I look forward for your comments and advise.

Best regards

AI

Here are the salient features:
Meeting with Wade:
The meeting with Wade indicated that he is open to suggestions to what needs
to be done on the regulatory front.  He indicated that if GA sees, and
agrees, he would be happy to finance-on a semi full time basis--such support
from Houston.  His major concern is to satisfy himself that: a) all what
needs to be done on the GA front is being done, b) manage and maintain an
effective team (i.e., those currently employed in Bombay and Delhi Offices)
just in case of need.  He mentioned that  he is not going to be "penny wise
and pound foolish" given the $850 million at stake.  I informed him that
Houston shall advise on the best approach as soon as taking stock is
complete, and generally speaking, shall also deliver on what is needed.
GA Needs in India:
The regulatory/government affairs needs in India are in the following five
areas:
a)  Third party Sales (basically for phase II output),
b)  Dealing with the Regulatory Commission,
c)  Dealing with MSEB (the customer),
e)  Government of India, and
f)  EBS.
The volume and intensity of work, however, shall differ with the following
scenarios, namely:  a) Enron/DPC intends to exit through arbitration, b)
Enron/DPC intends to renegotiate the contract, and c) Undetermined as of
yet.  Here is an assessment of this work load under the two former scenarios:

Arbitration  Renegotiation
Third party Sales (basically for phase II output),   low/medium  high
Dealing with the Regulatory Commission,    medium  high
Dealing with MSEB (the customer),    medium  high
Government of India, and      high   high
EBS.         medium  medium

It is surprising to mention that most colleagues here say that Enron/DPC
seems to be taking the arbitration route, although that renegotiation (in the
sense of renegotiate, stabilize, then take hit on equity and exit), is the
best way.  It is more surprising, however, that no one can speak with any
degree of certainty on where the ship is going.  In this context, a
risk-averse person shall take the "undetermined scenario" as equal to
"renegotiation", while a risk-taker shall take the "undetermined"" as equal
to arbitration.

Personal:
It is clear that the current personal here shall need support from Houston in
the "renegotiation" scenario on a semi full time basis.  Short of that,  a
visit every 6 weeks may  be adequate as the current team here will be working
under legal/commercial.

Suggested Approach:
Continue understanding the details of the outstanding regulatory tasks for
the coming 3 to 4 days.  If the above opinion is still the same, then the
suggested communication to Wade (preferably from you) is "if there is
renegotiation, then GA shall send the required person/persons on a semi-full
time basis, if arbitration, then GA shall be available on as needed basis".

Caveat:
It is not clear what does RMcDonald wants to see on the ground to tilt the
suggested approach above one way or another.


