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GAIL in joint bid talks for DPC

State-run Gas Authority of India Ltd, which last month expressed interest in buying ruined Enron Corp's $2.9 billion power project in India, is in separate talks with three other potential suitors for a joint bid, a senior company official said on Friday.

He said GAIL and its potential partner could carry out due diligence on the project separately and team up around the time of the financial bidding.

"We're talking separately to BSES, Tata Power and Shell to explore the possibility of a joint bid," the official in the gas marketing company, who asked not to be named, told Reuters.

"We may initially put in the expression of interest on our own next week and tie-up with a partner close to the actual bidding."

The bidding process for the bankrupt US giant's Dabhol plant kicked off this week after one of the main lenders to the project, the Industrial Development Bank of India, put advertisements in newspapers inviting buyers.

So far six major companies -- three foreign and three Indian -- have expressed interest in Dabhol Power Company's massive 2,184 MW power plant and an adjacent LNG facility, located about 250 km south of Mumbai.

The Indian firms include power utilities BSES Ltd, Tata Power and GAIL while the potential foreign suitors include Gaz de France, Royal Dutch/Shell and European oil major TotalFinaElf.

The entire Dabhol facility, said to be the largest foreign investment ever in India, has lain idle since June due to a dispute over the cost of power provided to its sole customer, a near bankrupt Indian state utility, the Maharashtra State Electricity Board.

The power plant was almost complete when construction on the 1,444 MW second phase was halted after the utility fell $240 million behind in payments for power provided. The 740 MW first phase began operating in May 1999.

Enron, the Houston-based energy trader which collapsed late last year, becoming the largest bankruptcy in US history, owns a 65 per cent stake in Dabhol Power Co.

General Electric Co and US-based contractor Bechtel Corp each own 10 per cent, and the state electricity board the remaining 15 per cent.

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