GE to Sell Stake, Help Restart India Power Plant

General Electric Co. has agreed to sell its stake in a $3-billion Indian power project once owned by Enron Corp., ending a four-year dispute with the government and lenders, officials said Monday.

The 42.5% stake in Dabhol Power Co. will be sold to a unit of the Maharashtra State Electricity Board for $145 million, board spokesman R.S. Dotonde said Monday. The board, which owns 15% of Dabhol, was the power generator’s sole customer.

Dabhol’s 740-megawatt plant shut down in May 2001 after the board stopped paying its bills, saying prices were too high. The facility’s revival may help attract foreign investment to a country that intends to spend $75 billion by 2010 to meet rising power demand. General Electric’s India unit expects $1 billion in revenue in five years from investments in energy, John G. Rice, president of the power-systems unit, said June 23.

“India is an important country to GE’s global growth,” Scott Bayman, president and chief executive of the company’s Indian division, said in an e-mailed statement Saturday.

General Electric will withdraw all suits filed against the Indian government, including an arbitration claim for as much as $6 billion, and help restart the plant, the statement said. The government was a guarantor to Dabhol Power Co. Helping to revive the project are National Thermal Power Corp., India’s biggest power producer, and Bharat Heavy Electricals Ltd., the nation’s largest power equipment maker, the statement said.

General Electric and San Francisco-based Bechtel Group Inc. built the plant, investing $1.2 billion in exchange for a 10% stake each. In April 2004, the two companies bought Enron’s 65% ownership. Bechtel still owns 42.5% of the failed venture and hasn’t announced any settlement.