India's powerless foreign investors

Jindal's joint venture powers its steel plant

Belgian utility Tractebel Power has reportedly quit an Indian joint venture, becoming the fourth foreign company to pull out of the country's power industry.

Tractebel sold its entire 50% stake in Jindal Tractebel Power Company (JTPC) to the Jindal group and investors for 2.35bn rupees, the Economic Times reported on Thursday.

Jindal and Tractebel were not available for comment.

Cogentrix of US, South Korea's Daewoo, and EdF of France have already pulled out of the country, while Britain's PowerGen has made clear its desire to quit.

Enron, India's largest foreign investor, has also announced its intention to pull out of a $2.9bn project after fighting with a local utility over payment defaults and high tariffs.

Power struggle

Foreign companies are upset over late payments by cash-starved state-run utilities and legal and bureaucratic hold-ups on some projects.

Indian law does do not allow electricity to be sold straight to consumers by the power generators, but must first be bought by the state utilities for distribution.

JTPC was a 50/50 joint venture between Tractebel and the Jindal group, who are one of India's big steel producers.

The power plant in the southern state of Karnataka supplies power to a 1.6 million tonne steel plant owned by a Jindal group company.