The Wall Street Journal billed it a national debacle akin to the World Bank´s withdrawal from the controversial Arun III hydel project in August 1995. But strangely enough, the announcement by the multinational Enron corporation that it was withdrawing from its bid for the 10,800-megawatt project on the Karnali river raised hardly a ripple of concern in Kathmandu.
Enron ´came´ to Nepal on September 1996, 16 months after the Arun III project had ´gone´, the World Bank having withdrawn from the latter in the face of spirited challenges put up by Nepali activists. The lack of concern for Enron´s departure might have had to do with the fact that Enron itself had been lackadaisical in bidding for Karnali, seeming to want only to have its foot in the door on the basis of grandiose claims about unbelievable bonanzas that would accrue to Nepal.
While Nepalis may not have been overly concerned over Enron´s withdrawal, there was every reason to worry about the country´s image visa-vis foreign investors, however. For, Enron being a loud and aggressive player in South and Southeast Asia, its departure attracted an unprecedented press internationally. Increasingly active in the Subcontinent, from Maharashtra to the Sunderban, Enron´s withdrawal was read by the media as proof that Nepal was not yet ´ripe´ for foreign direct investment.
Bad news, good news
The fact of Enron´s departure was true enough, but the reasons for its pulling out was misconstrued by most of the press. The spin that Enron´s publicity department put on its departure, as reported in the Wall Street Journal, was that "the regional market for power may be insufficient at this time for us to continue our development efforts". The Journal also swallowed whole Enron´s other claim for the departure, which was that "forecasts showed slower growth for China, a primary market to which Enron hoped to sell power from Nepal".