Enron International Is an Independent Power Company

Synapsis:

Enron International is an independent power company which was created in 1990. This company was mainly working to generate power in developing countries. Enron is a majority owner of Dabhol, a massive combined-cycle power plant in India's Maharashtra state. The Dabhol power plant was initiated in 1992 and took nine years to start operation. The total project cost is $2.9 billion. Enron owns 65%, Bechtel Enterprises owns 10%, General Electric owns 10%, and the Maharashtra State Electricity Board owns 15%. The project is 2,184 megawatts. Enron claimed that it was the largest independent power plant in the world. The plant closed in June 2001, due to a payment and contract dispute between the Maharashtra state government and the plant owners.. Enron was running by the CEO named Rebecca Mark who was known to be the most dynamic business woman in the whole USA. In 1991 when Narsimha rao, the prime minister of India asked them to build independent power project in India, she grabbed the chance as India was a new market for them. When she started the project she found out that India’s energy problem more than a single lack of generating capacity and lack of supplies of fuel as well. So they thought to $20 billion to build the largest distributer and consumer of liquid natural gas in India by 2010. They found two places to build their plant one in Dabhol and the another one in Tamil Nadu. It was quite a big project so they plan to import LNG from Qatar. In mid-1992 Mark started negotiated with the Indian government and the state government as well. Observing some factors Enron choose Dabhol first for their project. In 1995 Enron got the full approval from 170 state and federal permits. Everything was going great with the project which was estimated to cost $20 billion. But they were in turmoil when the political situations were becoming unstable in India that time. Enron’s supporting party Congress was getting damaged and the rise of Shiv Sena and BJP was inevitable. They defamed Enron and attacked the congress by making Enron an issue. This badly damaged the reputation of Enron in India and people were opposed of it. Enron was getting severely damaged by the Shiv Sena and BJP as they were bringing back the Gandhi doctrine and making false allegations to Enron like Bribing politicians and creating corruption in India. But Enron fought back because they did not do any illegal things. Soon the court gave them order to stop the plant construction work. On the other hand Enron send legal notice for implementing arbitration and sue the court if they were unable to work in India. Then they advertised about the plant so that people could know about the benefits of the power plant. That advertisement helped Enron a lot. They also brought the support of the project from the president of USA. Soon 80% of people in Maharashtra and 60% of those India wanted to start the project again. They at last compensated