Financial Times Jan 29, 2002
INTERNATIONAL ECONOMY: India urged to speed up economic reforms US AMBASSADOR WARNS ON INVESTMENT
By EDWARD LUCE
India stands little chance of lifting its paltry level of foreign direct investment unless it speeds up its economic reform programme and honours its commercial contracts, said Robert Blackwill, US ambassador to New Delhi, yesterday.
In an unusually hard-hitting speech for a diplomat, Mr Blackwill expressed deep frustration with India's apparent inability to resolve its long-running dispute with the now-bankrupt Enron over the US company's Dabhol power plant in western India.
The Dollars 2.1bn (Pounds 1.5bn) power plant has been closed for almost a year following the refusal of the Maharashtra state electricity board to pay its dues. The problem has been compounded by what is perceived as India's foot-dragging on arranging a buyer and agreeing a price for the state-of-the-art plant.
"The Dabhol dispute feeds a chronic perception among the overseas investing community that India may not be ready yet for big-time investment," said Mr Blackwill. In addition, there was a growing consensus that the "sanctity of contract may now be in doubt here, a concern that can spell death to potential investments".
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