India's mothballed $2.9bn Dabhol power plant, built by energy giant Enron, may be reopened in a joint Anglo-Indian venture.
Dabhol: To reopen at last?
Tata, India's leading industrial group, has signed an outline agreement with UK-based energy firm BP over evaluating the revival of the plant.
"The two will engage with the Dabhol stakeholders and other decision makers
to structure an economically viable solution for the project," Tata said.
The statement added: "Tata and BP have a longstanding relationship arising from prior joint ventures in solar and lubricants, which has also been a factor in the decision to jointly explore the potential of the Dabhol project."
The two firms last year separately submitted bids, which were cancelled as the legal problems mounted over the sale of the site.
The 2,184-megawatt plant has been shut for more 20 months, when it was closed over a payment dispute with the Maharashtra State Electricity Board, its only customer.
The bankruptcy of Enron has compounded the site's problems, with Indian financial institutions opening legal battles to recover 60bn rupees lent to pay for the plant's construction.
Enron still owns 65% of the plant, with Bechtel and GEC holding 10%, and MSEB having a 15% stake.
Last month Robert Blackwill, US ambassador to India, said that a speedy solution to the Dabhol problem would act as a stimulus to US investment in India.