The Adani saga shows we have learnt nothing from Dabhol

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Editor's note: In the 1990s, India was beginning to open up to the rest of the world and integrate with international financial markets. Foreign investors were warming up to the India growth story and were looking for opportunities. India desperately needed more electricity to drive its industry and broader economic growth. Both the central and state governments were willing to offer generous terms to independent power producers to set up new fast-track power plants. One marquee project that was supposed to send a strong signal and open the floodgates to foreign investment in India was the Enron-led gas power generation project in Dabhol, Maharashtra, which originated from a pitch made by the company to India’s power secretary in May 1992. By far India’s biggest power project (>2 GW plant) at the time, it was a joint venture led by a consortium of American corporate heavyweights: Enron with a 65% stake, and Bechtel and General Electric with 10% each, while the Maharashtra State Electricity Board held the balance 15%. There were various problems with the project, the primary one being the high cost …