Plan panel warns against reliance on Chinese power equipment suppliers
Mahendra Kumar Singh , TNN, Apr 2, 2010,
NEW DELHI: China is now posing a different kind of threat to India. The power sector's excessive reliance on Chinese equipment suppliers has made Planning Commission jittery.

The Plan panel has suggested looking at ways to boost indigenous manufacture as concerns are being raised over too much reliance on imported equipment, considering orders have already being placed for Chinese equipment for 44,000 mw in recent years.

To meet the growing requirements and address concerns about imported equipment, particularly from China, the Plan panel has asked the government to consider expanding its capacity to manufacture power generation equipment.

Arguing that import of Chinese equipment without developing local component vendors would mean continuing import of components and spare parts from China, the commission said in its mid-term review of the 11th five-year plan, "This will not only be a costly affair but also foreclose the opportunity for developing domestic manufacturing capability."

The suggestion came after a comprehensive study by the Plan panel on finding ways to increase domestic production capability without disturbing the timelines of ongoing projects.

In the review, the commission stressed the need for local component vendors for spares of Chinese equipment. "Chinese equipment suppliers have entered the Indian power market in a big way. There is a need to develop domestic manufacturing capacity and vendors for spare parts of Chinese equipment," the panel said.

The power equipment market has seen a tremendous rise as India has a power generation capacity of 153,000 mw and expects to add an additional 62,000 mw by 2012.

Domestic power generation companies have placed orders with Chinese firms for projects worth 44,000 mw, considering the inability of local manufacturers to meet the growing demand.

Bharat Heavy Electricals Ltd (BHEL), India's largest power equipment manufacturer, has annual capacity of 10,000 mw and is planning to expand its capacity to 20,000 mw. However, the government is looking to private players to set up new capacities to meet the power generation targets for 11th and 12th five-year plans.