Background on Enron's Dabhol Power Project

This report covers the inception, development and eventual closure of Enron’s Dabhol gas-fired power plant project in Maharashtra. During most of the project development period, Enron owned 80 per cent of the project, while General Electric and Bechtel (all American companies) each owned 10 per cent. In late 1998, the Maharashtra State Electricity Board purchased a part of Enron’s equity stake, which dropped Enron’s share to 65 per cent.Since its inception in 1992, the project was controversial due to its high working costs, political lobbying, losses incurred by the state of Maharashtra, and the potential adverse impact on local communities and natural ecosystem. The Dabhol Power Company began generating power in May 1999, then ceased operation of its first phase, and halted the construction of its second phase in May-June 2001.This report contains a timeline of these events and the associated economic and political issues. It also provides an overview of the financial losses incurred by Maharashtra, which eventually caused the plant to shut down. The report explains in detail how Enron enlisted supporters in the Indian and U.S. government to lobby for the project after the state initiated the closure of the power plant.