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June 28, 2001
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Money > Reuters > Report June 28, 2001 |
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AES may 'consider getting involved in DPC'The Indian subsidiary of US electricity firm AES Corp on Thursday said it "would consider getting involved" in the controversy-ridden Dabhol power project if an opportunity arose, but said it had made no formal proposal so far. US energy giant Enron Corp could pull out of the $2.9 billion project as a result of a bitter dispute with the Maharashtra state utility that has contracted to buy the power. The wrangle had given rise to speculation that AES India could take over the project from Enron's Indian subsidiary, Dabhol Power Corporation. In a press statement, AES said it had neither made any formal proposal to stakeholders nor received any. AES was among the first global firms to enter India when its government liberalised the power sector in 1992, and has so far invested a total $155 million in two separate projects. In 1998, it purchased 49 per cent of Orissa Power Generation Corporation, when Orissa's power assets were privatised. In September 1999 it also acquired the Central Electricity Supply Company of Orissa. AES initially came into India intending to develop and operate a coal-fired power plant in Orissa. But the project was delayed and is still under development. Enron's investment in the power plant is the country's single largest direct foreign investment. But Dabhol Power Corporation and the Maharashtra State Electricity Board are now in the midst of an acrimonious row that threatens to scupper the high-profile project. The power firm claims the state utility has reneged on its contractual obligations by defaulting on payments, while the utility claims Dabhol has also violated several clauses in the contract. The dispute has brought bad publicity to Enron and hurt India's image among foreign investors, including other global power firms which had eagerly entered the potentially huge Indian power sector. "The commitment and willingness of parties to a contract is an important consideration for our investment decision in any project," said AES's press release. "This is the basis for both our current investment and for any future investment we may make in India or any other country."
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