ENRON SEEKS "IMMEDIATE TALKS' TO REVIVE POWER PROJECT IN INDIA COMPANY RESPONDS TO STATE'S OVERTURE

ENRON SEEKS "IMMEDIATE TALKS' TO REVIVE POWER PROJECT IN INDIA COMPANY RESPONDS TO STATE'S OVERTURE

U.S. multinational Enron Corp. said it was ready for "immediate talks" with India's Maharashtra state to put its $2.8 billion power project back on track.

An Enron spokeswoman said Friday that Rebecca Mark, chief executive of Enron Development Corp. had "emphasised the importance of commencing discussions immediately" in a letter to the state's energy secretary."Ms. Mark said in her Oct. 5 letter that Dabhol Power Co. was ready, with its team, to start discussions on Oct. 7," the spokeswoman said by telephone from London.

Dabhol is the Enron entity charged with the project.

Ms. Mark was responding to a Sept. 29 letter from the Maharashtra government, which said it had decided to renegotiate the project and was seeking a postponement of arbitration proceedings.

On Thursday, Maharashtra Chief Minister Manohar Joshi and Ms. Mark, in separate announcements in Bombay and Washington, said they had agreed to renegotiate the $2.8 billion project, scrapped in August.

Government officials said the renegotiation process was likely to start in the next two weeks.

Ms. Mark, in her letter, turned down a request to postpone arbitration, due to start in London on Oct. 17, saying it was inappropriate until an overall agreement was reached.

"We are delighted by the news and look forward to an early response from the government," the Enron official said.

Analysts said the news could bring some cheer to foreign investors and stock markets already buoyed by Thursday's decision by India's market regulator to bring back carry-forward trade.

"It is a positive thing, a good sign," said Bhagirat Merchant, a stockbroker and former president of the Bombay Stock Exchange.

A senior partner at a local brokerage said: "It is well-known that the decision (to scrap the project) was more for political than economic reasons."

Ms. Mark said at a World Bank environmental conference in Washington: "Yes, we are renegotiating the Dabhol project. I hope it will be finished in about 30 days.

"In India, that probably means it will be within 60 to 90 days," she added.

When it canceled the 2,015-megawatt project, the Maharashtra government, run by a right-wing Hindu coalition, said the previous administration had agreed to unfair terms.

It said the project had not been awarded through competitive bidding and that the power tariffs agreed in the contract were too high.

One of the main campaign promises of the alliance, elected in February, was to review the Enron contract, India's largest planned foreign investment since it began to open its economy in 1991.

A power analyst said the government had gained the maximum political mileage from scrapping the project, and that "by forcing Enron to reduce the tariffs, (it) stands to gain even more."

Enron has agreed to cut capital costs and tariffs and to discuss any other aspects of the project to which the government was objecting.