== Dabhol Power Company == The Dabhol Power Company was a company based in India and was made to manage and operate the Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron, GE, and Bechtel. GE was selling turbines to Dabhol, Bechtel was building the plant, and Enron was managing and overseeing everything. The plant when finished would be an enormous $2.8 billion plant producing 2,184 megawatts of power. The power plant was built in two phases. Phase one would burn a fuel called naphtha, a fuel similar to kerosene and gasoline. Phase one would produce 740 megawatts and help stabilize the local transmission grid. Phase two would burn Liquified Natural Gas, or LNG. The LNG Infrastructure associated with the LNG Terminal at Dabhol was going to cost around $1 billion. The power plant's phase one project was completed finaly in 1996 two years behind schedule. In 1996 when India's Congress Party was no longer in power Dabhol seemed to have dissapeared. India refused to pay for the plant and stopped construction. Today the Dabhol Power Plant Sits silent not producing energy, no longer under construction, a waste of space. Enron invested around $900 million in the project.
First, i was surprised that the project was started when congress party was in power. For some reasons, i was under impression that current party was more transparent (Well, i am aware transparent government is an oxymoron} than the previous party, but it looks like i should ease of on my crack intake. Anyway, i came across the company's name from Joseph Stiglitz "The Roaring nineties" and here is an interesting quote from the book. :...Enron became a symbol of everything wrong with globalization. Nothing tells the story better than its investment in Dabhol located in the state of Maharashtra, India. While the whole transaction was tainted by political influence, it is the economics of the deal that concern me here. The world bank, though it was hardly Enron unfriendly, having provided over $700 million to various Enron projects, strongly criticized the project as costing too much, concluding that it was not economically viable. There was one way it could be made economically viable, for Enron but not for India - which was to garantee Enron high electricity price. Of course, high electricity prices would mean that India, struggling to compete on global markets, would be put at an even greater disadvantage. Enron received a so called take or pay contract, that left Enron taking the profit and India paying the price and bearing the risk. It was the kind of private/public partinership that the private sector finds so profitable thoughout the developing world. ....One might have thought that given that so much of the risk was being borne by India, the return would be relatively low, not so: the contract provisions were designed to yield Enron a before-tax return of 25%. The price that were set stunned outside observers. Before Enron was forced to back down in 1995, it proposed a tariff of 7-14 cent per kilowatt hour. Even afterwards when the price was reduced by some 25% - Enron was still able to earn a return that exceeded the normal level allowed by Indian law. (Note the company was selling electricity at twice the price of its local competitors. Given Enron low risk, subsidies from US government provided by America's Export-Import Bank, why did the India government sign the contract when it could get electricity at a better term elsewhere? Part of the answer was: US put political pressure. Enron officials joined a cabinet trip to India, and direct pressure was put on India by the American ambassador. Though Enron contined to maintain it abide by Foreign Corrupt Practice Act, those in India remain unconvinced When roit broke out, the police acted abusively, according to later reports by human rights watch. Whether justified or not, Enron was blamed, further intensifying the antagonism. When India threated to cancel or alter the deal, the full pressure of US administration was brought to bear, both during the Bush and Clinton administration. During Bush administration, the phone call allegedly came from Dick Cheney; during Clinton, only somewhat short of that level...... User:Wk muriithi 01:22, 15 Jun 2005 (UTC)
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Words begining with Dabhol_Power_Company:
Dabhol_Power_Company
Dabhol_Power_Company
Dabhol Power Company
== Dabhol Power Company == The Dabhol Power Company was a company based in India and was made to manage and operate the Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron, GE, and Bechtel. GE was selling turbines to Dabhol, Bechtel was building the plant, and Enron was managing and overseeing everything. The plant when finished would be an enormous $2.8 billion plant producing 2,184 megawatts of power. The power plant was built in two phases. Phase one would burn a fuel called naphtha, a fuel similar to kerosene and gasoline. Phase one would produce 740 megawatts and help stabilize the local transmission grid. Phase two would burn Liquified Natural Gas, or LNG. The LNG Infrastructure associated with the LNG Terminal at Dabhol was going to cost around $1 billion. The power plant's phase one project was completed finaly in 1996 two years behind schedule. In 1996 when India's Congress Party was no longer in power Dabhol seemed to have dissapeared. India refused to pay for the plant and stopped construction. Today the Dabhol Power Plant Sits silent not producing energy, no longer under construction, a waste of space. Enron invested around $900 million in the project.
Dabhol Power Company
First, i was surprised that the project was started when congress party was in power. For some reasons, i was under impression that current party was more transparent (Well, i am aware transparent government is an oxymoron} than the previous party, but it looks like i should ease of on my crack intake. Anyway, i came across the company's name from Joseph Stiglitz "The Roaring nineties" and here is an interesting quote from the book. :...Enron became a symbol of everything wrong with globalization. Nothing tells the story better than its investment in Dabhol located in the state of Maharashtra, India. While the whole transaction was tainted by political influence, it is the economics of the deal that concern me here. The world bank, though it was hardly Enron unfriendly, having provided over $700 million to various Enron projects, strongly criticized the project as costing too much, concluding that it was not economically viable. There was one way it could be made economically viable, for Enron but not for India - which was to garantee Enron high electricity price. Of course, high electricity prices would mean that India, struggling to compete on global markets, would be put at an even greater disadvantage. Enron received a so called take or pay contract, that left Enron taking the profit and India paying the price and bearing the risk. It was the kind of private/public partinership that the private sector finds so profitable thoughout the developing world. ....One might have thought that given that so much of the risk was being borne by India, the return would be relatively low, not so: the contract provisions were designed to yield Enron a before-tax return of 25%. The price that were set stunned outside observers. Before Enron was forced to back down in 1995, it proposed a tariff of 7-14 cent per kilowatt hour. Even afterwards when the price was reduced by some 25% - Enron was still able to earn a return that exceeded the normal level allowed by Indian law. (Note the company was selling electricity at twice the price of its local competitors. Given Enron low risk, subsidies from US government provided by America's Export-Import Bank, why did the India government sign the contract when it could get electricity at a better term elsewhere? Part of the answer was: US put political pressure. Enron officials joined a cabinet trip to India, and direct pressure was put on India by the American ambassador. Though Enron contined to maintain it abide by Foreign Corrupt Practice Act, those in India remain unconvinced When roit broke out, the police acted abusively, according to later reports by human rights watch. Whether justified or not, Enron was blamed, further intensifying the antagonism. When India threated to cancel or alter the deal, the full pressure of US administration was brought to bear, both during the Bush and Clinton administration. During Bush administration, the phone call allegedly came from Dick Cheney; during Clinton, only somewhat short of that level...... User:Wk muriithi 01:22, 15 Jun 2005 (UTC)
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