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18 July 2003 - The investment arm of UK energy giant BP is planning to team up with India's Tata Power Co to bid for Enron's stalled 2184 MW Dabhol power plant, a senior Tata official is reported as saying.
Dow Jones Newswires reported Mohan Gurunath, Tata Power vice president for Strategy and Business Development as saying, "The joint venture company will draft a revival plan to get Dabhol back on its feet."
The plant has been idle for two years following a dispute over payments for power between Enron Corporation and sole customer, the Maharashtra State Electricity Board
Tata Power, a unit of India's Tata Sons, and BP Global will each hold a 26 per cent stake in the joint venture, giving them majority control. "We are also looking for other investors to take a stake in the joint venture," said Gurunath, adding Tata Power has been talking to minority investors in Dabhol Power Company, state-run gas major Gas Authority of India Ltd., and Bechtel and General Electric Co. of the US, to join the project.
The proposed joint venture company plans to submit its rehabilitation plan for Dabhol to the Industrial Development Bank of India, or IDBI, which is the project's biggest creditor.
Enron was commissioned by the Indian government in the early 1990s to set up the power project in the western state of Maharashtra, which became the largest foreign investment in India. Its failure has cast a shadow over further investment projects in India.
A Tata Power official said the company's interest in Dabhol was prompted by the government's newly passed Electricity Act, which has made it easier for new power generating facilities to be set up. Tata Power already operates power plants and transmission facilities in Mumbai.
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