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Sunday, 19 August, 2001, 17:03 GMT 18:03 UK
India power plant talks suspended
Enron plant
What could be the largest foreign investment in India is at risk
Talks were suspended on Sunday without agreement on how to proceed with what would be India's largest foreign investment to date, a $2.9bn power project due to be carried out by a subsidiary of the electricity giant Enron.

The global power giant has run into local difficulties
The global power giant has run into local difficulties
The negotiations between federal officials from the western Maharashtra state and the Enron-subsidiary, Dabhol Power Corporation, had been scheduled to continue for another two days.

"We had a free and frank exchange of views, but because of the complex nature of the matter, the conciliation proceedings had to be adjourned," the Indian Government's representative, Attorney-General Soli Sorabjee, was quoted as saying by the Press Trust of India.

No date for the resumption of talks was released.

The price of power

Dabhol Power has been accused of charging too much for electricity locally.

Federal officials want a contract between the company and the state utility to be renegotiated.

The Maharashtra State Electricity Board and Dabhol Power are already fighting each other in court over outstanding electricity bills.

The state utility owes nearly $64m in outstanding payments.

In May, the company shut down the power plant after the electricy board cancelled a seven-year-old agreement to buy power.

The electricity board was the plant's only customer.

US-based Enron argues that the cancellation was unlawful.

Project at risk

The state-level dispute is threatening to disrupt the planned building of the world's largest natural gas-fired power plant.

In addition to Enron, which controls a 65% stake in the project, Bechtel and General Electric are involved with a 10% stake each.

The remaining 15% is controlled by the Maharashtra State Electricity Board.

See also:

11 Jul 01 | South Asia
Energy giant appeals to India
30 May 01 | South Asia
Enron plant 'shut down'
25 May 01 | Business
India's power crisis escalates
20 May 01 | Business
Enron warns India
23 Apr 01 | South Asia
Enron debates India future
06 Feb 01 | South Asia
Enron cashes in India power bill
12 Jan 01 | South Asia
Protest against India power project
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