India will not buyout Enron’s Dabhol interest

Enron has had its offer to sell its interests in the Dabhol Power Company to the Indian government at cost declined. US energy group Enron wish to withdraw from the $2.9 bn power project and is in dispute with the Maharashtra State Electricity Board over payments for electricity under its PPA.

Wade Cline, Enron’s MD in India, confirmed that the proposal had been made and that Enron was willing to accept payments in instalments. The Indian government has reportedly turned down the offer and wants Enron to withdraw from the project and sell its interests at a loss.

The Maharashtra State Electricity Board (MSEB) have refused to draw power from the plant at rates well in excess of current prices.

Separately, Dabhol Power Company confirmed a local media report Thursday that the company had warned its sole buyer the MSEB against divulging parts of a power purchase agreement.

“I confirm that we have sent a letter to the MSEB to that effect. We will wait for their response,” said Jimmy Mogal, DPC’s spokesman.

According to The Hindu Business Line newspaper, in a letter sent to the MSEB chairman Wednesday, DPC told MSEB that divulging documents of the power purchase agreement would amount to breach of a confidentiality agreement.

Both DPC and the lenders to the power project can sue the MSEB if the papers are made public, said the report.

In an order last week, the Maharashtra State Electricity Regulatory Commission asked MSEB to make available the power purchase documents to Prayas, a consumer organization.

Enron has a 65 per cent controlling stake in DPC. The Dabhol project, which is located in the western Indian state of Maharashtra, has a capacity to generate 740 MW of electricity. The plant has been shut since May 29 and work to develop a second phase of the plant has been halted.

No posts to display