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BJP reaps gain from

power project reversal

NEW DELHI: India's main opposition party stands to reap a political windfall from the quashing of the nation's biggest foreign investment project at the expense of a red-faced ruling Congress party, analysts said on Friday.

The Bharatiya Janata Party (BJP), part of a rightwing Hindu coalition governing the western state of Maharashtra, reinforced an important populist front in its campaign to capture national power with the cancellation of the $2.8 billion power project.

Thursday's decision to scrap the project, already being built by US multinational Enron Corp and two US partners, fits in nicely with the Hindu nationalist party's drive to paint Congress as corrupt and partial to rich foreign firms.

India must go to the polls by mid-1996, and the BJP has embarrassed Prime Minister P.V. Narasimha Rao's Congress party in recent state elections, including a victory in Maharashtra.

"The BJP hopes to score its domestic political point against the Congress and, at the same time, present a law-abiding, albeit nationalistic, face to international investors," The Economic Times said.

"It is certain to create fresh problems for Congress' bid to retain power."

The BJP has stirred popular opposition to the project, which was signed by a Congress-led state government just before it lost power to the Hindu alliance earlier this year.

Pran Chopra of the Centre for Policy Research said there was widespread public feeling, stoked by the BJP, that Enron had won a shady, back-room deal without competitive bidding.

"While there is a constituency that favours better infrastructure and more power, the constituency against wheeling-dealing in these matters is stronger," he said.

Allegations of corruption have been a painful thorn in Congress' side and helped drive a rebel faction away from the mainstream earlier this year.

The BJP expects to benefit from the arrest of a rising Congress cadre in a recent murder case -- the suspect's wife was found burning in a tandoori, or earthen, oven -- and an official report alleging links between politicians and gangsters.

The strength of the BJP's stand was reflected in the universal support it won from opposition rivals. "The decision of the Maharashtra government is a victory of public opinion," said Jaipal Reddy, spokesman for the left-wing Janata Dal.

"Indian crooks or foreign sharks can't always take this big country for a shameful ride," The Financial Express said.

Congress reacted with embarrassed silence, compounded by the absence of Rao who was in Malaysia on a four-day visit.

The timing of Maharashtra's decision gave it symbolic weight -- the BJP said it was standing up for domestic industry and consumers while Rao was courting foreign investors.

Political analysts said a recent statement by the US Department of Energy warning of adverse consequences if the Enron project was cancelled played into the BJP's hands.

BJP president L.K. Advani said foreign threats had steeled the Maharashtra government's resolve. "In fact, every attempt to intimidate the new (Maharashtra) government actually served to arouse the spirit of economic nationalism," he said.

But Advani also indicated the BJP did not want India to crawl back into an economic shell.

"The BJP assures foreign investors that it would welcome foreign investment consistent with India's requirements and on terms mutually advantageous and not one-sided."-Reuter