| Headline: Playing power games Source: Euromoney Date: February 2001 Author: Kala Rao
Last December the state government of Maharashtra declared that power purchased from the Dabhol Power Company (DPC), the Indian subsidiary of Texas-based Enron, the largest foreign investor in the country, was too expensive and announced a review of the second phase of the project. Many dismissed it as a political ploy by the newly-elected Congress coalition to embarrass its predecessor, now the central government, which had cancelled and then renegotiated the Dabhol contract six years ago. But by January, the Maharashtra State Electricity Board (MSEB), the state’s distribution company and the sole buyer of Dabhol’s power, had not paid for power it had bought in November. A partial bailout by the state government allowed MSEB to part-pay its total dues of Rs3.07 billion($65million) to the company in mid-January, but the row is far from resolved. On January 25, the day MSEB failed to pay its next bill for power purchased in December, DPC retaliated by invoking the state government guarantee. | |||||||||||||||||||||||||||||||||||||||||