Presented by :

Arunim Datta
Ranjana Sharma
Saurabh Saha
Varun Gupta
DABHOL POWER PROJECT
How did Enron use construction
stoppage to their advantage ?
Bockground
O Aprll 2001 : Lnron began arbltratlon proceeolngs
O May 2001 : ceaseo operatlon ot tbe Pbase | portlon ot tbe
plant
O [une 2001 : balteo constructlon on tbe 90 completeo
Pbase || portlon ot tbe plant (1,444 megawatts).
O Lnron clalms tbat tbe state owes lt $64 mllllon ln unpalo
bllls
%0 -uld-up
O Mid-2001 : Lnron began to look tor a buyer tor lts 65
stake ln tbe Dabbol Power Company (DPC)
O Corporate 5trategy : ennetb Lay, CLO announceo
company no more lnteresteo ln maklng long term
lnvestments ln lntrastructure projects. Lnron wanteo to
lnvest ln traolng relateo actlvltles
O No longer keen to tlgbt tbe necessary battles wltb tbe
|nolan government to make tbe project a success
O DPC serveo an asset transfer notice to tbe MSL8 ano
tbus moveo closer to termlnatlng tbelr agreement ano
orove Dabbol to closure
ontnu0d
O 'ioIating the Custons Act - Sbltteo some crltlcal plant components
(e-cblps, cooeo CDs etc) ano contloentlal oocuments to a sate place
(Lnron's beaoquarters at Houston)
O Lpecteo $ 1 bllllon tor lts stake ln DPC. 8looers epect to pay about
balt atter oue olllgence. Consloeratlon was also to be glven to tbe
amount requlreo to re-start Pbase-| generatlon ano tor completlon ano
start-up ot Pbase-||
O Lalo-ott all lts worktorce (some 12,000 plant employees) ecept just a
tew securlty
O |n a press lntervlew ln August 2001, Mr. Lay warneo tbat lt Lnron olo
not recoup at least lts tull costs ln bullolng tbe plant (reporteo ln tbat
artlcle to be $1 bllllon), |nola coulo be subject to U.S. sanctlons
%hank You