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Reliance wants BSES to take over Dabhol

The Reliance business group wants private utility firm BSES, in which it has a substantial stake, to take over the local unit of ruined energy trader Enron Corp, a Reliance Power official said on Wednesday.

Earlier this month, BSES managing director R V Shahi was quoted in a financial daily, The Economic Times, as saying his company would adopt a wait-and-watch policy on buying out Enron's stake in its Indian unit, the Dabhol Power Company.

"Having made huge investments in BSES, Reliance is very interested in the success of BSES and its taking over Dabhol Power Company," D V Kapur, chairman of Reliance Power Ltd said.

The Reliance group owns more than 30 per cent of BSES, which supplies power in Maharashtra.

BSES had already started due diligence on Dabhol's power plant, Kapur told reporters on the sidelines of a business seminar in Kolkata, but said Reliance was not interested in bidding on its own.

Enron owns 65 per cent of Dabhol, General Electric Co and construction firm Bechtel Corp hold 10 per cent each, and the Maharashtra State Electricity Board holds the remaining 15 per cent.

Dabhol stopped work on the second phase of the $2.9 billion, 2,184 MW power plant in Maharashtra, once a showpiece of India's foreign investment, following a dispute with the utility, the plant's sole buyer.

The plant has been idle since June.

In the weeks just before Houston-based Enron's collapse last month, all the parties involved in the Dabhol project, including Indian and foreign lenders, were hoping to resolve the matter by finding a buyer for the plant and adjacent LNG terminal.

Private utility Tata Power Co had also demonstrated strong interest, but Enron's subsequent bankruptcy further complicated the process.

Foreign and local lenders to Dabhol are slated to meet on December 13 and 14 in Singapore to discuss ways to revive the stalled power project.

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