Project

Management
CASE STUDY
THE DABHOL POWER PROJECT
Introduction

 Indian authorities signed agreement with Enron

 Construction of gas-fired power plant
 international partners for investment in DPP
ENRON PARTICIPATION

 Enron take charge to distribute Liquefied Natural Gas (LNG)

 Setup;
 2 LGN terminals first at Dabhol in Maharashtra
 Enron imported LNG through terminal from Qatar
 DPC build, owned, and operate DPP (Dabhol Power Plant).
 In phase 1, Enron owned 80%,
 Bechtel 10% and
 GE 10% interest for DP Project in 1992.GE
DEVELOPMENT OF DABHOL POWER
PLANT;
 Enron visited Maharashtra state for site inspection
 signed MoU on 20 June 1992
 20-years contract;
 MSEB would buy 90% of the electricity;
 and Debt-to-equity ratio was 70:30.
Dabhol power project

Phase 1 Phase 2
 power plant production capacity  capacity of the plant was 1320
695 MW MW
 capital cost of US$920 million  capital value of US$1.9 billion
 Started operation in May 1999  Based on LNG
 MSEB paid US$20 million to DPC
monthly.
 Use Naphtha fuel
DISSENSION/CONTROVERSIES

 world bank denied for loan

 not economically applicable.
 signed MoU was one sided in approbation of Enron.
 High fuel price
 MSEB committed to buy 90% power form the DCP.
DABHOL POWER PLANTS FINACIALS
Phase 1 Financing
 Phase 1 financed by US$276
million equity base
 and debt based US$646 on 3
march 1995
 along with 3 foreign investors
Plant 2 Financing
 In may 1999 phase 2 financing was
come to an end;
 with the capital equity cost of
US$452 million
 debt of US$1.414 billion
 foreign debt was 1.082 billion.
Claims and Settlements.

 construction of phase 2 halted in May, 2001

 Indian creditors get hold of DP in march, 2004
 offshore lenders terminated the PPA.
 DCP 65% stake of Enron goes to BE and GE
 October 2001, DCP issued final termination notice to MSEB
 MSEB to pay DPC $ 220 billion per year.
 forced MSEB to shut down other state-owned plants, which
generated power at 25% of DPC’s cost.
THANK YOU