ABSTRACT This article re-evaluates a failed large irrigation enterprise and agricultural plantation in the Khanate of Khiva, an Imperial Russian protectorate in contemporary Uzbekistan, during the 1910s. Co-initiated by Russian entrepreneurs and the Khivan government, this project has been considered one of several lucrative, speculative ventures by Russian capitalists exploiting imperial privileges. This article demonstrates that the entrepreneurs involved in the dacha Lawzan enterprise possessed adequate capital and technology for this large-scale project. However, the project was hampered by legal restrictions put in place by the imperial government and by lingering conflict with nomads in the Khanate and ultimately failed. The case of dacha Lawzan exemplifies government–entrepreneur tension in the colonial territories of Imperial Russia, which impeded the economic development projects initiated by local governments to attract private capital to irrigation and cotton cultivation.