In 1992,the Enron Development Corporation,a subsidiary of the Houston-based energy company,signed a contract to build the largest-ever power plant in India,requiring a total investment of $2.8 billion.After Enron had spent nearly $300 million,the project was canceled by Hindu nationalist politicians in the Maharashtra state where the plant was to be built.Which of the following are true?
A)Subsequently,Maharashtra invited Enron to renegotiate its contract.
B)The lack of an effective means of enforcing contracts in a foreign country is clearly a major source of political risk associated with FDI.
C)In an effort to pressure Maharashtra to reverse its decision,Enron "pushed like hell" the U.S.Energy Department to make a statement in June 1995 to the effect that canceling the Enron deal could adversely affect other power projects.The statement only compounded the situation.The BJP politicians immediately criticized the statement as an attempt by Washington to bully India.
D)all of the options

Question

Quizplus · Accepted Answer

All the statements are true. Maharashtra did invite Enron to renegotiate its contract after the initial cancellation, highlighting the complexities of international business and political risk. The lack of effective means to enforce contracts in a foreign country is indeed a significant source of political risk for foreign direct investments (FDI). Enron's efforts to pressure Maharashtra through the U.S. Energy Department and the subsequent backlash from BJP politicians illustrate the challenges and sensitivities involved in international negotiations and the impact of political actions on business operations.

In 1992,the Enron Development Corporation,a Subsidiary of the Houston-Based Energy