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We want out of Dabhol project: Enron chairman

US energy major Enron wants to pull out of the Indian power project and expects the Indian government to buy out its stake in the controversial $2.9-billion Dabhol Power Project near Bombay.

"We want out," Kenneth Lay, Enron chairman, said in an interview published in the Financial Times on Friday.

He indicated that after stopping work on phase-II of the project, GE Capital and Bechtel were also interested in selling their stakes.

"We have made it pretty clear to the government leadership that we are now at a point where we would like to be taken out and we think most of our partners do too," Lay said.

Lay, who was in India several weeks ago in a bid to salvage the negotiations via talks with the government leaders, said: "The government now realises this is a serious impediment to foreign investment and other business relationships in India and there is an urgency to get it resolved."

"We have fought this once before, put it back together, fixed the contracts, but we don't want to do that again and have the same problems in a few years," he said.

Enron was involved in arbitration over the Dabhol power purchase contract in 1995 with the earlier Shiv Sena-BJP government in Maharashtra.

Price has been a central issue. Enron insists the tariff for MSEB, which is about three times higher at its most costly point than that levied by Indian producers, is due to low dispatch rates and high fuel costs.

GE Capital on Thursday indicated it might sell its stake in the project.

"We would give serious consideration to credible offers, which would enable us to realise our financial objectives for this investment, as appropriate," it said.

Enron has been locked in a bitter dispute with its sole Indian client, the Maharashtra State electricity Board over MSEB's unpaid bills of $45 million.

MSEB says Enron's tariffs are too expensive and has rescinded its power purchase agreement, and its commitment to the $1.8-billion second stage, which would complete India's first liquefied natural gas project.

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