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