Local mfg as a yardstick for Chinese suppliers

New Delhi: The Government plans to insist on domestic manufacturing as a yardstick for Chinese equipment suppliers bagging contracts for future power projects in India.

“For future orders, we will move to an absolute insistence on domestic manufacturing by Chinese equipment manufacturing firms, barring orders that have already been placed so far,” the Minister of State for Power, Mr Jairam Ramesh, said here.

The Prime Minister’s approval is expected shortly on the proposal, he said.

According to fresh assessments made by the Government, an estimated 18,000-20,000 MW of new generation capacity in the country is likely to be set up using Chinese equipment between now and 2020. “Domestic manufacturing is going to be the single biggest qualifying parameter for upcoming projects.

“The modalities are being worked on. We cannot rely on imports as that leads to loss of investments and potential manufacturing sector jobs within the country,” he said.

Mr Ramesh also said a move has been initiated towards standardisation of sets in the country. “We need standardisation and only through this can we reduce project cycle time. A firm policy is in the works,” he said.

Among major Chinese suppliers doing business in India, Dongfang Electric Corporation has made a beginning and is in talks with the West Bengal Government for setting up a manufacturing facility in the State.

Other major Chinese equipment suppliers active in India include Sichuan Machinery and Equipment Corporation (SCMEC) and Shandong Electric Power Construction Corporation (SEPCO).

The move by the Government comes at a time when dumping charges have been levelled by State-owned equipment major Bharat Heavy Electricals (BHEL) against Chinese companies to grab equipment supply contracts for mega power projects.

In terms of performance, BHEL officials maintain that its equipments were much better than the competitors, referring to independent studies that establish that the plant load factor of BHEL projects was 90 per cent while it was 60 per cent in the case of those using Chinese equipment.

BHEL is currently ramping up its power equipment manufacturing capacity to 15,000 MW while homegrown engineering major Larsen & Toubro is expected to have a capacity of around 4,000 MW in place by the next couple of years.