Enron Lawyers Meet to Weigh Legal Options

A day after a state government canceled Enron Corp.’s $2.8-billion power plant project, lawyers for the U.S.-based company met Friday to consider going to court to seek compensation for money already spent.

Enron’s lawyers gathered in London to discuss that and other legal options, said company spokeswoman Vrinda Walavalkar, stressing that no decision had been made.

Enron also was examining nearly 150 contracts it had signed with suppliers to study its potential liability for damages, she said.

The Economic Times, India’s leading business paper, said Enron’s creditors also were being consulted.

The government of Maharashtra state, India’s industrial heartland, announced Thursday it was scrapping the project. It alleged costs were inflated and said the agreement ignored environmental concerns and had been negotiated in secret without competitive bidding.

The Enron deal was the largest foreign investment made in India since 1991 and was seen as a cornerstone of the country’s 4-year-old economic reforms, designed to build a modern economy with the help of foreign capital and expertise.

In Washington, the State Department voiced concern about the cancellation and its potential impact on the investment climate in India.

Despite the order to halt work, construction continued Friday at the first power station at Dabhol, 100 miles south of Bombay, said Walavalkar. She said the company had not received official word on the state’s decision.