Hopes of an early revival of the defunct Dabhol power project, set up by failed US energy firm Enron Corp, have soared as Maharashtra grapples with a severe electricity crisis.

Experts say the resumption of the Dabhol power plant, which has been lying idle since 2001 following a bitter payment dispute, will help the state meet a large part of the spiralling power deficit in the years ahead.

The Dabhol power project, located some 180 km away from Mumbai, was projected as India's largest power plant with a total production capacity of 2,184 MW.

"The demand for power in Maharashtra has grown by 8 to 10 percent per annum in the last few years on the back of a rise in increased economic activity," said P.S. Bami, president of India Energy Forum.

"Despite the increase in power usage, no measures were taken to increase generation by setting up new projects. All this while, the Dabhol project was also lying idle and no urgency was shown to restart the venture," Bami told.

"Dabhol alone would have added over 2,000 MW of power. It's a large quantity and would have managed to bridge a large portion of the deficit that the state is facing now."

Maharashtra, the country's most industrialised state, has been reeling under an unprecedented power crisis in the last few months.

The electricity deficit in the state has soared to nearly 4,000 MW with supply pegged at 13,200 MW. All cities, except Mumbai, go powerless for four hours every day while villages face nine hours of load shedding

According to Bami, the power crisis in Maharashtra will worsen in the coming years if mega power projects such as Dabhol are not made operational at the earliest.

"It's not possible to bridge a deficit of nearly 4,000 MW by buying power from other states or central agencies. This deficit will rise in the future if new projects are not started," he said.

The first phase of 740 MW of the $2.9 billion Dabhol plant was already up and running and the second phase of 1,444 MW was scheduled to start generation soon before Enron pulled the plug on the project in 2001.

Enron walked out of the project shortly before being declared bankrupt back home in the US following a bitter payment dispute with its sole customer Maharashtra State Electricity Board (MSEB).

GE and Bechtel, which now together own 86 percent of Dabhol Power Company after buying out Enron's stake, are embroiled in legal battles with the Indian authorities to recover their dues.

"It's not going to be easy to revive Dabhol at the earliest with a view to resolving the prevailing power crisis in Maharashtra," said Janish Shah, a power sector analyst with Networth Stock Broking Ltd.

"Scores of cases are pending in courts across the globe and they will take time to reach a settlement. But the power crunch clearly shows that the Indian government needs to show some urgency in restarting the project," added Shah.

"Because of the Dabhol imbroglio no major private power producer has come to Maharashtra in the last few years. Restarting of the project will send a very positive signal to other investors."