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DPC bids to open on March 15

Terms for selling off bankrupt US energy trader Enron Corp's $2.9 billion power project in India are set, with six major companies so far expressing interest in bidding, a source close to the planning group told Reuters on Monday.

March 14 has been set as the deadline for submitting bids for the huge 2,184 megawatt gas-fired power plant and adjacent liquified natural gas, facility located 250 kilometers south of Mumbai, said the source speaking on condition of anonymity.

The bids will be opened the next day.

"After that who knows what will happen. Post March 15 nothing has been decided. Who knows if there will be a clear winner or if they'll be further bidding," said the source, a high-ranking official of a lender to the project.

He said six major companies -- three foreign and three Indian -- have expressed interest in bidding for the plant, which has lain idle since June.

The three potential foreign bidders -- Royal Dutch/Shell, European oil major TotalFinaElf and French state-owned Gaz de France -- are mostly interested in Dabhol's LNG facilities.

The potential Indian bidders are private power utilities BSES Ltd and Tata Power Company, and Gas Authority of India Ltd, a state-run gas marketer.

The source said it was the intention to sell the facility as a whole, instead of accepting separate bids for the power plant and LNG landing jetty and storage depot. But he added interested parties may form consortia to bid jointly for an operation they planned to split up later.

Bidders must pay a $100,000 non-refundable "earnest money deposit" and sign a confidentiality agreement, he said.

A data room will be set up in London where each qualified bidder will be given three days to carry out due diligence, followed by probably a two-day onsite visit to the plant by each bidder, the source said.

Operating data, information on the status of the nearly completed Phase II and historical records detailing construction of the plant, the largest foreign private investment ever in India, will be provided through the data room, he said.

There will be one pre-bid conference, probably in the second half of February, to give "greater clarity that would affect the bid price," he added.

The Industrial Development Bank of India and the Overseas Private Investment Corporation, a US agency that provides insurance to American companies investing in "risk areas", head the group overseeing the bidding process.

Enron owns 65 per cent of the project, General Electric Co and construction firm Bechtel Corp each won 10 per cent and Maharashtra State Electricity Board the remaining 15 per cent.

MSEB is the government-run monopoly distributor of electric power in the western state of Maharashtra where the plant is located.

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

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