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    Dabhol Power Project

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    tushar_shetti
    This case study analyzes Enron's Dabhol Power Project in India. Enron took on significant risks by owning 80% of the project and relying on long-term purchase agreements. However, Enron did not adequately prepare for political and currency risks. It could have reduced risks by involving more local partners and institutions. Major issues included higher costs than expected, lack of understanding of the local environment and politics, and lack of transparency, which hurt local sentiments.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    Dabhol Power Project

    Uploaded by

    tushar_shetti
    446 views11 pages
    This case study analyzes Enron's Dabhol Power Project in India. Enron took on significant risks by owning 80% of the project and relying on long-term purchase agreements. However, Enron did not adequately prepare for political and currency risks. It could have reduced risks by involving more local partners and institutions. Major issues included higher costs than expected, lack of understanding of the local environment and politics, and lack of transparency, which hurt local sentiments.

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    This case study analyzes Enron's Dabhol Power Project in India. Enron took on significant risks by owning 80% of the project and relying on long-term purchase agreements. However, Enron did not adequately prepare for political and currency risks. It could have reduced risks by involving more local partners and institutions. Major issues included higher costs than expected, lack of understanding of the local environment and politics, and lack of transparency, which hurt local sentiments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    446 views11 pages

    Dabhol Power Project

    Uploaded by

    tushar_shetti
    This case study analyzes Enron's Dabhol Power Project in India. Enron took on significant risks by owning 80% of the project and relying on long-term purchase agreements. However, Enron did not adequately prepare for political and currency risks. It could have reduced risks by involving more local partners and institutions. Major issues included higher costs than expected, lack of understanding of the local environment and politics, and lack of transparency, which hurt local sentiments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11
    At a glance
    Powered by AI
    Enron was an American energy company that employed 22,000 people and claimed $101 billion in revenues in 2000. It was named one of the most innovative companies for six years. However, it went bankrupt in 2001.

    Risk of investment, renegotiation of contracts after investment, problems with local authorities, currency risk, costs of energy and demand for electric power, violation of human rights

    Long term contracts, participation of overseas investment corporations, revenues tied to US dollar, partners GE and Bechtel

    Case Study Analysis

    on
    Introduction

     Enron Corporation was an American energy company based

    in Houston, Texas. Before its bankruptcy in late 2001, Enron


    employed approximately 22,000 people and was one of the
    world's leading electricity, natural gas, pulp, paper, and
    communications companies, with claimed revenues of nearly
    $101 billion in 2000. Fortune named Enron "America's Most

    Innovative Company" for six consecutive years .


    Dabhol Power Project
    GE; 10

    Bechtel; 10

    Enron
    Bechtel
    GE

    Enron ; 80
    DEAL DEAL WITH MSEB

     MSEB purchased 15%


    of the share of Enron

    MSEB; 15
     MSEB agreed to buy
    GE; 10
    power from ENRON Enron
    whether they have any Bechtel
    Bechtel; 10
    requirements or not Enron; 65 GE
    MSEB

     . MSEB signed the


    PPA with enron on
    that condition
    Questions To be answered??????

    What risks did Enron face going into the Dabhol project?

     Risk of investment
     Renegotiation of contracts after investment
     Problems with local authorities
     Currency risk
     Costs of energy and demand for electric power
     Violation of Human Rights
    Questions To be answered??????

    How did Enron prepare for the risks of the project?


     Long term contracts
     Participation of Overseas Private Investment Corp, US Export-
    Import Bank, International Finance Corp.
     Revenues tied to US dollar
     Partners GE and Bechtel
    Questions To be answered??????

    How could Enron have dealt with risk more effectively?


     Enron could have relied less on FDI
     More reliance on local partners to construct and operate project
     Greater participation of other Indian institutions and local Public
    Questions To be answered??????

    Why did Enron choose ownership (FDI)?


     Have control over the assets of the company

     To improve operational effectiveness

     To learn about market for future projects


    Questions To be answered??????

    What were the major Issues faced by Enron?


     Less cost effective.
     Less exposure to the Indian environment.
     Unaware of the political environment.
     Lack of Transparency in the deal.
     Hurt the sentiments of People.
     Currency Issues
    Bibliography

    FACT SHEET=Background on Enron’s Dabhol


    Power Project.
    Corp watch: www.corpwatch.org
    Asia times: www.atimes.com (18/7/2001)
    International Business By Daniel
    Team members

    Mayank Dand
    Tushar Shetti
    Sumukhi Vaishampayan
    Vinamra Bandekar
    Manoj Lambhate
    Heena Siddiqui

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