16 May, 2002 – Prospects for the resumption of power production at the troubled Indian Dabhol power plant improved following the latest round of negotiations between financial institutions involved in the project finance and the Maharashtra State Electricity Board(MSEB).
MSEB, the sole customer for the Enron power plant, and the consortium of lenders are keen to restart operations to avoid any further deterioration in the condition of the plant, according to sources.
Power ceased to be generated after Enron failed to resolve a long running dispute with MSEB over outstanding payments and electricity charges. The Financial Institutions are reportedly willing to allow power to be sold at reduced rates in the short term, with any arrears being settled when a deal to sell the plant has been agreed.
Private companies including Tata Power and BSES have expressed interest in buying Enron’s stake for which the process of due
diligence was halted due to litigation, sources said.
The two-phase power project is still only partially completed with a 740 MW generating facility completed but plans for an additional 1444 MW section on hold.