NEW DELHI (Agence France-Presse) India’s stalled $2.9 billion power project built by collapsed U.S. energy giant Enron is likely to restart after an agreement was reached over pricing, the government said yesterday.
The electricity board in the western Indian state of Maharashtra is awaiting clearance from the regulatory authorities to buy power from the Dabhol Power unit at a price of 2.8 rupees (about 6 cents) per unit, Power Minister Anant Geete told Parliament in a statement.
He said permission also had to be obtained from the Bombay High Court before the project could be restarted.
The pricing agreement will be valid for a year, the minister added.
The 2,184-megawatt Dabhol power facility stopped production more than 18 months ago after a payment dispute with its single customer, the Maharashtra State Electricity Board.
In the meantime, Dabhol Power’s holding companies Enron Mauritius Co and Enron India Holdings filed for bankruptcy in New York last year.
The Indian lenders to Dabhol Power went to court in order to protect their assets given the enormous numbers of claims and counterclaims faced by the company.
Indian financial institutions lent $1.25 billion toward the $2.9 billion cost of building the plant.
Mr. Geete said the government had advised the lenders to settle with the Maharashtra electricity board over pricing and had appointed the state-run National Thermal Power Corp. to carry out maintenance of the unit.
Enron holds a 65 percent stake in Dabhol Power, while Bechtel and General Electric Co. each hold 10 percent. The Maharashtra State Electricity Board holds the remaining 15 percent stake.
The power plant is the single largest foreign investment in the country.