Enron had bagged the project through international competitive bidding last year, but could not go ahead with it as the state did not provide fuel linkage to it.

The Ranipet project was part of 20 short-gestation projects put up for private-sector development by the Tamil Nadu Industrial Development Corporation, a state-owned development institution.

The state government conceived the projects to meet the interim demand, expected to surge owing to rapid industrial development, as mega projects coming up were to go on stream only by the turn of the century.

However, with a restrictive liquid-fuel policy ofthe central government, the state government could not provide fuel linkage for more than five projects. Enron was told by the board last week that it would not be able to extend the escrow facility to the Ranipet project, as its capacity to provide the facility was restricted to projects worth 4,000 mw, and some other projects had already been given the comfort.

Enron felt that the absence of an escrow backing would make raising of debt resources more difficult, and the project would not be attractive in such a situation.

The official said Enron and 14 other independent power producers were given time till July 25 to convey to the board whether they were interested in going ahead with the project without escrow.

While Enron backed out, a consortium, including Ashok Leyland Power and Fiat SPA, had confirmed their plans to put up four short-gestation projects in the state, in the range of 220-230mw each.

The four projects would come up at Gummidipoondi, Chengalpattu, Cuddalore and Pallipalayam, butwould not have the benefit of escrow account guarantee.Several power producers were yet to get back to the board with their decision. A clearer picture on how many projects were to be shelved is likely to emerge only next week.