One of the most unsavoury sagas in the history of India's power sector is likely to come to an end, with leading Indian financial institutions on the verge of inking a deal with foreign lenders relating to the buying over of offshore debt, and the possible revival of a controversial mega power project near Mumbai.

Top honchos of leading Indian financial institutions have been negotiating with foreign lenders in New York, Singapore, Mumbai and other financial centres over the past few weeks, in a bid to bring an end to the deadlock over a 2,184 mw, nearly $3 billion mega power project in Maharashtra state.

The project - Dabhol Power Corporation (DPC) - was initially promoted by America's infamous Enron Corporation, and backed by other promoters including General Electric and Bechtel Corporation.

Indian institutions, led by development finance major Industrial Development Bank of India (IDBI), and including the country's leading banks - State Bank of India, ICICI Bank, and Canara Bank - have a $1.3 billion exposure to the project that stopped generating power in May 2001, following a dispute with the Maharashtra government.

About a score of foreign lenders, including Citicorp, Bank of America and ABN Amro, have a $600 million exposure to the project, and have been - like their Indian counterparts - desperately trying to get back their money.

The Indian government, worried over the lack of foreign investments in the power sector - mainly because of the imbroglio over the DPC plant - has been pushing for an early end to the dispute.

Indian financial institutions have now convinced foreign lenders to sell their $600 million debt at a 40 per cent discount to them. Once the deal is signed, the Indian lenders hope to set up a special purpose vehicle (SPV) to revive the DPC project.

Initially, the Indian government wanted two public sector energy giants - the National Thermal Power Corporation and the Gas Authority of India Ltd - to invest about Rs5 billion each in DPC, to revive it.

Both public sector companies were, however, reluctant to do so. They are now likely to be consultants to the revived project. General Electric and Bechtel, after acquiring Enron's 66 per cent stake in the project last year, now own 86 per cent of shares in DPC.

The remaining 14 per cent is held by the Maharashtra State Electricity Board (MSEB), a state government-controlled utility. The Enron-promoted project has faced problems from day one.

The project, once touted as a shining example of FDI (foreign direct investment) inflow into the power sector, was signed when the Congress was in power in Maharashtra.

The Shiv Sena-Bharatiya Janata Party (BJP) combine accused Enron of paying bribes to get the project cleared, blissfully ignoring the fact that the proposal was cleared in Delhi when the BJP was in power for less than a fortnight.

The Sena-BJP vowed to scrap the project and dump it into the Arabian Sea on coming to power. It did exactly the opposite, offering - according to its critics - even more benefits to Enron, and even expanding the capacity on favourable terms to the former US energy giant.

When the Congress-led Democratic Front regime returned to power about five years ago, it's leftist supporters called for scrapping the agreement with Enron, as the MSEB was being forced to buy power from the first phase of DPC at a hefty price.

The state government trashed the agreement, forcing DPC to shut down its plant, which has been going to seed over the past three-and-a-half years. Maharashtra, in the meantime, has been facing a severe power crisis, and most cities - except Mumbai - are faced with three-hour power cuts daily.

Now with the Congress in power both at the centre in Delhi, and in Mumbai, the prospects of a revival of the DPC project appears to be brighter.

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Will 2005 be the turning point for the Indian aviation sector? Going by the promises being made by the government, it appears possible that efforts to improve the creaking aviation infrastructure - decrepit airports, ageing airline fleets, mothballed projects - will finally take-off.

The Indian Civil Aviation Ministry - headed by a zestful politician, Praful Patel, of the Nationalist Congress Party, which is led by Maharashtra's regional strongman, Sharad Pawar, who is also the federal agriculture minister - plans a major overhaul of the sector.

Mumbai and Delhi airports - the country's busiest international airports - will be privatised, 30 other major airports will be refurbished and upgraded, domestic private airlines will be allowed to operate on international routes (except the lucrative India-Gulf sector), and further liberalization of sector is being planned.

Analysts are hopeful 2005 will herald the much-awaited turnaround in India's neglected civil aviation sector. "After years of unfulfilled potential," predicts the annual 'Outlook' report of the Centre for Asia Pacific Aviation, "2005 holds promise of being the year when Indian aviation finally comes of age."

India's civil aviation sector reforms have stalled over the years, after hitting severe turbulence. The Tatas, India's much-respected and leading business group - whose founder JRD Tata established Air India, the nation's flag carrier, which was later nationalized - in disgust scrapped plans to start a domestic airline together with Singapore Airlines, after successive governments came out with asinine objections.

Infotech czars in Bangalore, the country's IT hub, have been frustrated at the lack of progress in building a much-needed international airport in the city, as politicians have stonewalled all attempts to promote one.

Mumbai's international and domestic airports must be among the lousiest in the world, and passengers have to wait interminably - even bribe attendants - to get trolleys for their baggage.

Access roads to the airport pass through slum colonies, and stray dogs, cattle, birds, even slum-dwellers venture onto the runway, delaying flights, and costing airlines billions of rupees in unnecessary expenditure.

Recently, some critical gear, meant to help pilots land their aircraft, was stolen from the runway. But all that is likely to change this year.

The process of privatizing Mumbai and Delhi airports has begun, the construction of two green-field airports - in Bangalore and Hyderabad - has also reached a crucial stage, and the policy guidelines, throwing open international routes to private operators, has also been framed.

The country's domestic sector is witnessing brisk growth of 25 to 30 per cent annually, thanks to the introduction of apex fares (tickets bought two months in advance are cheaper than upper-class train fares, attracting hundreds of thousands of first-time fliers). New airlines are being established, including low-cost carriers.

Vijay Mallya, a leading liquor baron - and a Member of Parliament - is launching his Kingfisher Airline (labelled after his wildly popular beer), while Naresh Goyal, chairman, Jet Airways (the leading private airline) is coming out with an IPO (Initial Public Offering) shortly, the first in the aviation industry.

Jet and Air Sahara will launch flights on international routes, while Air India, will launch its own low-cost carrier to operate flights to the Gulf. India's dozen-odd airlines - including Air India and Indian Airlines, the two state-owned carriers - are expected to place orders for a whopping 200 aircraft this year, as demand for seats soar.

International airlines are also starting flights to cities like Bangalore, Hyderabad, Ahmedabad and Chennai, as there's an increasing in-flow of tourists. Last year saw a nearly 25 per cent growth in international tourist arrivals, which has nearly touched the 3.5 million-mark.

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RETAIL SECTOR: IT is the herd mentality at play, and almost everybody with some amount of surplus cash, wants to get into the business. Consultants and analysts have been touting the retail sector as a sunrise industry, and scores of investors have been rushing in, promoting international-standard shopping malls, in cities like Mumbai, Delhi and Bangalore. And hundreds of traders have been lapping up the space, setting up shop.