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Playing power games

Richard Celeste

Doing business with politicians is a wretched business, as independent power producers in the Indian subcontinent have learnt lately.

Last December the state government of Maharashtra declared that power purchased from the Dabhol Power Company (DPC), the Indian subsidiary of Texas-based Enron, the largest foreign investor in the country, was too expensive and announced a review of the second phase of the project. Many dismissed it as a political ploy by the newly-elected Congress coalition to embarrass its predecessor, now the central government, which had cancelled and then renegotiated the Dabhol contract six years ago.

But by January, the Maharashtra State Electricity Board (MSEB), the state's distribution company and the sole buyer of Dabhol's power, had not paid for power it had bought in November.

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