Dhabol Power ProjectView on Project Management

Presented by Vishal Shivkar Vipula Gangurde Vineeth Nair

Dhabol Power Company

The Dhabol Power Company was a company based in India, formed to manage and operate the Dhabol Power Plant. The Dhabol plant was built through the combined ef fort of Enron, GE, and Bechtel. GE provided the generating turbines to Dhabol, Bechtel constructed the physical plant, and Enron was charged with managing the project through Enron International Construction of the project was severely delayed due to Political scenario in Maharashtra and started generating power in 1999

Dhabol Power Company

Issue over Power Purchase Agreement and Bankruptcy caused Enrons exit terminating the operations
NTPC and GAIL eventually decided to take over the operations RGPPL was floated to look after the Dhabol Project The revival of the project was dif ficult however the power station had resumed operations at 100% of its installed capacity of 1967 MW in 2010

Network Diagram for Dhabol Project

1992
(G.O.M, Enron, Bechtel & GE )signed MOU

1993 1995

PPA power purchase agreement was signed between DPC and MSEB Construction of phase 1 begins ;Change of Govt. in Maharashtra; Project scrapped Renegotiation, construction of phase 1 resumes

1996

1999

Phase 1 becomes operational

2000

Maharashtra stops paying for Dhabol as of its $22 million December 2000 bill.

2001

Enron files for bankruptcy, DPC shuts down

WHAT WERE THE RISKS FACED BY DPC ?

Environmental risk
Human rights risk Political risks Technology risks Legal risks

WAS THE PPA IN FAVOUR OF DPC ?

PPA (Power Purchase Agreement ) Many financial parameters were not defined and all the figures in PPA were estimations. Conflicts between the PPA and the Indian Electricity Supply Act (ESA) law.

MAIN PROBLEMS PLAGUING THE ILL - FATED -DHABOL POWER PROJECT

Less cost effective. Unaware of the political environment. Lack of Transparency in the deal. Failure of the GOI Failure of GOM Dispute Over the Cost of Power World Bank turned down financing
i. It felt that the project was "not economically viable". ii. It also advised the project did not satisfy the test of least cost power and iii. It was too large for the power demands of Maharashtra.

SUGGESTIONS
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

CONCLUSION
Dhabol Power company was an example of total Project Management failure and this could also be a reason for the fall of Enron Corporation The Project Schedule went haywire due to unforeseen reasons like Political and some Social factors A proper PEST analysis could have avoided such a situation. Signing of the Power Purchase Agreement(PPA) should have been incorporated keeping in mind the Project Control Project team should have included Local members as it was a new venture by a foreign company. A proper costing analysis should have been conducted as this was one major reason for the failure of the DPC DPC- A good example showing how Project Management is vital for any project