Enron, which is one of the world's largest integrated natural gas and electricity companies with approximately $15 bn in assets, is once again in newsnot for the misdeeds of the company but for the future of its Indian power companyDabhol. Promoted in India under the `fast track power project' the Dabhol power project has always been in controversy. Initially, the controversy was regarding the operations of the company, then it was the corruption charges and its high tariff policy. This time around the debate is about its future as the parent company has filed for bankruptcy in the US.

The Dabhol Power Company (DPC) is a joint venture of Enron, GE Capital and Bechtel Enterprises with each holding a stake of 65%, 10% and 10% respectively. Maharashtra State Electricity Board (MSEB) holds the remaining 15%. Indian power sector was in shambles and Government was extremely keen to rectify the power situation in the country and thought that a `fast tracking' power plant in the private sector was the answer. At that moment Enron seemed to be a fairly good solution, if not the only one. It was also felt that it would be a great benefit in terms of expertise and money if overseas operators were brought in.

The Indian financial institutions also played an active role in promoting this multi-crore, fast track project. The consortium of Indian lenders consisting of ICICI Bank, Industrial Development Bank of India, State Bank of India, IFCI and Canara Bank have invested in the project. The investment of the Indian banks and financial institutions is to the extent of 70% of the total debt component of the project. IDBI was the institution which had made the maximum investment. In absolute terms, Indian banks and institutions sanctioned a total loan of Rs.6,194cr. Of this, a disbursement of more than 90% has already been completed. This includes non-fund exposure of Rs. 3,200 cr on account of guarantees to exposure taken by overseas banks and export credit agencies.

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