One of the main lenders to the Dabhol Power Company, the Industrial Development Bank of India (IDBI) said that Indian financial institutions were ready to take over the troubled $3 million Dabhol Power Company if its US promoters Enron pulled out. However, they would be looking for someone to run the facility.

Enron has invoked two guarantees which require that the federal government pay if the state government defaults on payments for power from Dabhol. Having given notice to quit the project over failure by the Maharashtra State Electricity Board to honour payments for contracted electricity, Enron faces counter claims for breach of contract.

A spokesman for the IDBI was reported today as saying, “In the worst circumstances [Enron pulling out], we can take over the power project.” However, he said that the financial institutions would not run the company and an operations and maintenance contractor would be appointed.

The 740 MW Phase 1 operation was financed by a $221 million loan by the US bank Exim, backed by the IDBI, the State Bank of India and ICICI. A 1 444 MW Phase-II is also due to be commissioned.

The bank spokesman said three US energy companies have expressed interest in taking over Dabhol Power Company, but refused to divulge further details.

Indian financial institutions were due to meet in Delhi Monday evening to discuss the future course of action. Asked about the central bailout package, involving sale of power from Dabhol to energy deficit states, he said he was unaware of developments and would not be able to comment.