3. • Govt. invites private sector
1991
• Enron invited to India by Govt. of India
• MSEB signs MOU with Enron
1992
• FIPB grants approval
• PPA negotiations start
• Central electricity authority clears project1993
• Govt. of Maharashtra signs guarantee
• Govt. of India signs guarantee
• Split into two phases1994
4. • Phase 1 financing ($920 million)completed
• BJP-Shiv sena comes to power
• MUNDE committee recommends cancelation1995
• New deal announced
• London tribunal agrees to terminate
proceedings against Govt. of Maharashtra1996
• Phase 1 begins operation & Phase 2
financing of $1.87 billion secured
• Congress(I) wins state elections1999
• Rebecca Mark leaves Enron
• Govt. official announces contract should
be renegotiated due to high power cost2000
5. • Feb-Enron invokes Indian govt. guarantee to collect $17 million
overdue bills
• April- Issues a notice of arbitration to Indian govt. to recover $21.9
million; MSEB agrees to pay $28.6 million
• May-Govt. sets up Godbole committee; Enron rejects payment of
$29.1 million saying it was submitted “under protest”
• Sep-Letter to India PM from Ken Lay
2001-The year of Twist and Tales
6. Pest Analysis
Industry: rivalry
Amongst existing competitors
(SEB’s,NTPC ETC.)
Economic:
What was at stake while
the project was being
rolled out?
Political:
Who supported and
who were the forces
against it?
Social:
How were the people affected
amidst the turmoil?
Technical:
Did it have the required
specifications?
Bargaining
power of
buyers
Bargaining
power of
suppliers
Threat of Entrants:
Cogentrix of US; Daewoo of Korea
etc.
Threat of substitutes: State run
coal based electricity boards
7. Political factors:
• Eagerness of Indian govt.
• Defeat of Sharad pawar
• BJP-Shiv sena govt. stiff resistance of the project
• Munde committee
Economic aspects:
• Tariff rate too high(Rs 2.40 /unit; other PSU Rs 2.15/unit)
• In 2001, power from Dabhol was four times more expensive than that
from domestic
• Enron was looking for an escape route
8. Social factors:
• Local people opposed the Project
• Numerous opposition organizations were formed
• Enron used local thugs to attack opposition activists
• In 1999 ‘Human Rights Watch’ reported violation of human rights
Technical aspect:
• Built for use of LNG but used Naphtha in phase 1
• DPC was unable to ramp up to peak levels within the contracted time
• This carried a whopping penalty of Rs 4 billion on each occasion
• MSEB established that Enron failed on one important criterion - the
inability to deliver to technical specifications
9. Present scenario-2009
• Renamed as Ratnagiri Gas and Power Pvt.
Ltd.(RGPPL)
• Started operation again in 2006 but was
closed on 4 July 2006 due to lack of Naphtha
supply
• Qatar based Rasgas Ltd. supplied LNG in April
2007
• Plant operational a now with 900MW LNG
fired capacity
10. Subsequent developments in power
sector since 2001
• Electricity act 2003: An Act to consolidate the laws…for taking
measures conducive to development of electricity industry,
promoting competition therein, protecting interests of consumers
and supply of electricity to all areas
• National electricity policy,2005: A significant portion (Say 15%
of the new capacity) should be committed to trading or other forms
of competitive power markets
• Draft tariff policy,2005: “All the power needs to be procured
competitively”
11. Sector-wise Installed Capacity in %age
State- 52.5
Central- 34
Private- 13.5
Break-up of Energy Sectors
Total Thermal- 64.6
Hydro-24.7
Nuclear- 2.9
Renewable Energy
Resources- 7.7
12. Major players in Power Sector Today
Public Sector
• NTPC
• NHEPC
• SEB
• NPC
Domestic
Private Sector
• TATA Power
• RPG Group
• Reliance
Energy
International
Private Sector
• China Light
and Power
• Marubeni
Corporation
14. Bibliography
• Tony Allison, Enron's eight-year power struggle in India , January 18,
2001. August 21, 2009
<http://www.atimes.com/reports/CA13Ai01.html>
• Five Forces Guide. The Internet And The Business Environment, Stefan cel
Mare University of Suceava, July 20, 2008. July 22, 2009
< http://www.scribd.com/doc/377404/Five-Forces-guide>
• Dabhol, Wikimedia Foundation, Inc. August 20, 2009. August 20, 2009.
<http://en.wikipedia.org/wiki/Electricity_sector_in_India>
