BP and Tata Power offer to buy Dabhol stake

5 June 2003 – The Indian Financial Express newspaper reports that an offer of $150m has been jointly made by international energy firm BP and India’s Tata Power for the 85 per cent foreign stake in the stalled Dabhol power project in the western Indian state of Maharashtra.

The offer is said to fall well short of the $370m asked by the foreign equity owners although the two sides have held a series of meetings to try and work out the details of any sale.

The Dabhol Power Company is 65 per cent owned by the bankrupt Enron Corporation with General Electric and Bechtel each owning ten per cent. The remaining 15 per cent interest is held by the Maharashtra State Electricity Board.

It was a dispute with the Maharashtra State Electricity Board over power sales that led to the cessation of power production at the 2184 MW power plant in June 2001, prior to the collapse of Enron.

Attempts to restart power production over recent months have failed with domestic and foreign lenders unable to agree on the future of the project.