PowerMin’s U-turn: Wants Chinese equipment suppliers back
Amitav Ranjan Indian Express
Monday , Apr 12, 2010

In a reversal of its earlier stand, the Power Ministry now wants Chinese equipment suppliers back to help meet India’s thermal generation target during the 12th Five Year Plan (2012-17).

Without naming the neighbour, the Ministry has asked the Central Electricity Authority to allow coal linkages for projects below 200 MW that source brand new plants from within or outside the country. “If at all some safeguard is to be kept, the recommendation for grant of coal linkage for the 12th Plan can be subject to the fulfilment of the condition that the main plant equipment should not be second-hand/phased-out provided there is clear-cut and well-accepted norms to identify such equipment,” it wrote to CEA on March 31.

During the UPA-I regime, the Power Ministry in July 2008 issued a directive that a plant of size less than 200 MW would not be supplied coal from state-run mines if the equipment was not sourced domestically. This was done in order to halt cheap Chinese imports and provide an advantage to Indian manufacturers.

Rule D2 of the “Coal Linkage Policy for 12th Plan Projects” says: “Cases of linkage for captive power projects/independent power projects having unit size less than 200 MW will be considered only if equipment are (sic) sourced from reputed domestic manufacturers.”

The ministry had justified its ruling then saying that it was seeking to prevent “dismantled or phased-out inefficient power plants from foreign countries finding their way into the country”. Chinese firms — mainly China National Machinery & Equipment Import and Export Corp or Shandong Electric Power Construction Corp — are the only foreign vendors with a significant presence in India for supplying units of size less than 200 MW.