Business Negotiation Skills Free Essay Example, 1500 words

The timing of setting the power plant coincided at a critical time after the economic slow down of 1991 as no other company was willing to take such a huge risk of investing in India. It was called nothing but inspired lunacy on the part of Enron (Choukroun 2002). Enron signed a contract with the Maharashtra State Electricity Board (MSEB) by putting it's and its partner companies stakes in Dabhol Power Project. The negotiations for the project began primarily with the two stakeholders from the Indian government, one was the Indian state of Maharashtra and the other was MSEB. The project proposal of making a 2015 megawatt power plant with the proposed investment of US$3 billion was cleared initially. On its side, Enron was not the sole company; it had made and entered into a joint initiative with the investment of 10% each by General Electric and Bechtel. It required Liquefied Natural Gas to power the plant, which it arranged from another of its joint venture in Qatar, 1200 miles a way from the plant location in Dabhol. As it was the biggest ever project taken by Enron in India, it offered to produce electricity in two phases. We will write a custom essay sample on Business Negotiation Skills or any topic specifically for you Only $17.96 $11.86/pageorder now In the 1st phase, it was to produce 695 megawatts from the locally arranged LNG. In the second phase the project was to produce 1320 megawatts through gas imported from Qatar (Negotiation-project-India 2010). Business interests of Enron from this project were to gain long-term profits for the company investors from a buyer that would purchase electricity, which was the MSEB of Maharashtra. To finalize the contract, a memorandum of agreement was signed in less than five days between the MSEB and Dabhol Power Plant representing Enron of purchasing electricity at the rate of 2.40 rupees (7.3 cents US) per kilowatt hour (Negotiation-project-India 2010). The Indian media had already been debating the pros and cons of the project, finding a number of loopholes.