The Planning Commission has asked the power ministry to furnish a report on the mounting difficulties faced by Indian project developers due to poor performance of Chinese equipment.
The commission’s directive has come close on the heels of the Central Electricity Authority (CEA) telling the power ministry that fresh electricity generation capacities of plants, which rely on Chinese equipment, are performing poorly, and developers have been experiencing problems on this account.
In the course of a meeting chaired by its member BK Chautrvedi, senior power ministry officials suggested the need for a fresh look into the imports issue.
So far, capacity of 2,262 MW has been commissioned in the first quarter of the current financial year, mostly on Chinese equipment. Chinese companies have reportedly bagged orders worth Rs 40,000 crore for upcoming capacities.
At the behest of the power ministry, the CEA had carried out a study in April to ascertain the reasons of rising discontent against Chinese equipment.
“Overall, the assessment made by CEA is that Chinese plants performance is not satisfactory on certain parameters. The commission has asked the power ministry to critically examine the CEA’s report on Chinese equipment and submit a report as soon as possible,” a top power ministry official told The Indian Express.
Concerned that equipment producer BHEL would lose a chunk of its market share, owing to stiff competition from Chinese firms, Arun Maira committee, set up by the Planning Commission, had, earlier this year, recommended imposition of customs duty to a limited extent. Endorsing its contention, the Union Cabinet in March approved the proposal to levy 5 per cent custom duty along with 12 per cent countervailing duty and 4 per cent additional duty on imported power equipment.
A department of heavy industry official contended that Chinese equipment have been found to have lesser efficiency and needs a far longer time in synchronisation of commercial operations.