Dabhol Power Company

The Dabhol Power Company was a company based in India, formed to manage and operate
the Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron, GE,
and Bechtel. GE provided the generating turbines to Dabhol, Bechtel constructed the physical plant,
and Enron was charged with managing the project through Enron International.
In 2005, it was taken over and revived by the RGPPL (Ratnagiri Gas and Power Private Limited), a
company owned by the Government of India[1]

The infrastructure development[edit]

Starting in the mid-1990s, Unocal and its partners planned to build a 1,000 mile gas pipeline
from Turkmenistan to Multan, in Pakistan at a cost of about $2 billion. Also considered was a route from Iran to
Multan which was seen as feasible due to Iran's huge oil and gas reserves. However, In 1996 when
the Sanctions against Iran were imposed, the FBI blocked the plan, and it was forcibly cancelled. A proposed
400 mile extension from Multan to New Delhi would bring some of the gas into India's network of gas pipelines
at a cost of $600 million.
A sea route from Gwadar, Pakistan, to Dabhol, India, was never considered despite both locations being
coastal towns.

Dabhol Power Station[edit]

Main article: Dabhol Power Station
The plant was to be constructed in two phases. In March 1995, the ruling Congress Party in Maharashtra lost to
a nationalist coalition that had campaigned on an anti-foreign investment platform. In May, hundreds of
protesting villagers swarmed over the site to protest the displacement of people that would take place, and a
riot broke out. Human Rights Watch and Amnesty International eventually charged the security forces guarding
Dabhol for Enron with human-rights abuses; Human Rights Watch blamed Enron for being complicit. On
August 3, the Maharashtra state government ordered the project to be halted because of "lack of transparency,
alleged padded costs, and environmental hazards." Construction ground to a halt. By then, Enron had invested
about $300 million into the project.[2]

Phase One[edit]
Phase one was set to burn naphtha, a fuel similar to kerosene and gasoline. Phase one would produce 740
megawatts and help stabilize the local transmission grid. The power plant's phase one project was started in
1992 and finally completed two years behind schedule.

Phase Two[edit]
Phase two would burn liquefied natural gas (LNG). The LNG infrastructure associated with the LNG Terminal at
Dabhol was going to cost around $1 billion. [3]
In 1996 when India's Congress Party was no longer in power, the Indian government assessed the project as
being excessively expensive and refused to pay for the plant and stopped construction. The Maharashtra State
Electricity Board (MSEB), the local state run utility, was required by contract to continue to pay Enron plant
maintenance charges, even if no power was purchased from the plant. The MSEB determined that it could not
afford to purchase the power (at Rs. 8 per unit kWh) charged by Enron. From 1996 until Enron's bankruptcy in
2001 the company tried to revive the project and spark interest in India's need for the power plant without
success. The project was widely criticized for excess costs and deemed a white elephant. Socialist groups
cited the project as an example of corporate profiteering over public good. Over the next year Enron reviewed
its options. On February 23, 1996, the then government of Maharashtra and Enron announced a new
agreement. Enron cut the price of the power by over 20 percent, cut total capital costs from $2.8 billion to $2.5
billion, and increased Dabhol's output from 2,015 megawatts to 2,184 megawatts. Both parties committed
formally to develop the second phase. The first phase went online May 1999, almost two years behind
schedule, and construction was started on phase two. Costs would now ultimately climb to $3 billion. Then
everything came to halt. The MSEB refused to pay for all the power, and it became clear that getting the
government to honor the guarantees would not be an easy task. Although Maharashtra still suffers from
blackouts, it says it does not need and cannot afford Dabhol's power. India's energy sector still loses roughly $5
billion a year. This plant was taken over by Ratnagiri Gas and Power Private limited in July 2005.

Dabhol Today[edit]
The power plant Phase I which was renamed Ratnagiri Gas and Power Pvt Ltd (RGPPL) started operation in
May 2006, after a hiatus of over 5 years. However, the Dabhol plant ran into further problems, with RGPPL
shutting down the plant on 4 July 2006 due to a lack of naphtha supply. The Qatar based company RasGas
Company Ltd. started supplying LNG to the plant in April 2007.
The Dabhol Power plant consists of 3 blocks, each consisting of two GE make frame 9 gas turbines and one
GE steam turbine. Block 2 commissioning work and Gas turbine 2A trial runs started on 25 April 2007. The
Dabhol Power Plant Project is operational as of April 2009 with 900 MW RLNG fired running capacity but there
are problems due to non-availability of operational insurance. Decisions tend to be largely dependent upon
political developments in the country as well as performance of newly repaired rotors.

Dabhol Power Station

Dabhol Power Station is located near Anjanwel village in Ratnagiri district, about 160 kilometres
(99 mi) south of Mumbai. The power station was a built by the Dabhol Power Company (DPC), which
was a joint venture of Enron, General Electric, Bechtel and Maharashtra Power Development

Corporation.[1] At the start of its construction in 1992, the Dabhol power station was the biggest
foreign investment in India.
Due to a political controversy related to the pricing of power from the station and allegations of
favoritism,[2] the operation of the Dabhol power station was interrupted on several occasions.
Subsequently, operations were interrupted due to the Enron bankruptcy and disputes between
Enron's creditors and the Government of Maharashtra(GoM). The power plant was finally
rehabilitated and taken over by Ratnagiri Gas and Power (RGPPL), which successfully revived and
operates the plant.[3]

History[edit]
Construction of the Dabhol Power Station was planned to be completed in two phases. The first
phase was a 740MW unit to use naphtha as the fuel. Construction started in 1992 and finally
completed in May 1999.[2] The next phase was 1700MW of units using liquefied natural gas (LNG) as
fuel. At its height, the construction of the Dabhol power station employed 15,000 people. [4]
The power project ran into trouble due to the power purchase agreement between the DPC and the
state's power utility, Maharashtra State Electricity Board (MSEB). The agreement negotiation lacked
transparency, and details had not been made public.[5] In 2000, MSEB was paying DPC Rs. 4.67/kwh
while the tariff that MSEB charged its customers was Rs. 1.89/kwh. [5]
By 2001, there were a number of political controversies brewing over the power purchase
agreement. The price paid by MSEB for power from the Dabhol station was over twice that from
other power stations in the state.[2] With escalating tensions between MSEB, GoM and DPC,
operation of Phase I and construction of Phase II came to a halt in May 2001. With the Enron
bankruptcy, Enron's stake in DPC was bought out by GE and Bechtel.
The plant was moth-balled for 5 years, while the various claimants, including MSEB, GoM, GE,
Bechtel, Indian banks and the Government of India, settled their disputes over payments.
In May 2006, after protracted negotiations, state-owned NTPC Limited and GAIL agreed to take over
the power station. RGPPL was floated as a joint-venture between these two companies to own and
operate the Dabhol power station.[3] However, the revival proved difficult due to 3 catstrophic
breakdowns in the equipment supplied by GE.[6]
After repairs to the equipment, the power station had resumed operations at 100% of its installed
capacity of 1967 MW in 2010.

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