PowerMin indicates foreign help needed for ultra mega projects

As major power players got their first glimpse at the governments bid documents today for its fifth ultra mega power project...

As major power players got their first glimpse at the governments bid documents today for its fifth ultra mega power project (UMPP),the ministry of power told the Parliament that Chinese suppliers continued to outperform their domestic counterparts,in terms of efficiency and deadlines. The ministrys statements during question hour today further indicated that the government may not have confidence in Indias power sector alone to shoulder the burden of commissioning all major power projects of the future without the help of foreign,mostly Chinese,power companies.

On the same day that NTPC and Indias major private power companies reviewed request for qualification documents (RFQ) for the Sarguja UMPP in Chhatisgarh,the ministry of power declared that Chinese units both sub and supercritical have been commissioned or contracted for commissioning within shorter durations. Chinese vendors are quicker in delivering power equipment than any other country… there is a slight difference in project implementation schedule for sub-critical units for Chinese suppliers, minister of state for power Bharatsinh Solanki told the Rajya Sabha today. Though no super critical unit has been commissioned,the Chinese suppliers are indicating shorter time schedules for completion compared to the Indian suppliers.

Similarly,the Finance Minister Pranab Mukherjee declined to slap an additional 10 per cent duty on all power equipment imports when he unveiled the FY 10-11 Union Budget on February 26. Had he adhered to the whims of the power ministry and the department of heavy industry,an additional duty for foreign imports would have led to more business for new domestic players who have joined hands with foreign equipment suppliers. Were not yet sure of that being the best decision at this juncture… there will be other means and other opportunities, said a high ranking finance ministry official under a condition of anonymity.

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The government has been preparing tools which would help weed out foreign players which include plans like one which has granted NTPC control of the next 11 supercritical projects and a similar policy which would ban foreign players for getting involved in UMPPs. The Empowered Group of Ministers for all decisions concerning UMPPs examined the matter regarding the sourcing of supercritical equipment for UMPPs with Phased domestic Manufacturing Programme (PMP), Solanki said. Accordingly,a committee under the planning commission has been set up for looking into details and work out the modalities.

The ministry has implemented a policy placing a limit on the number of UMPPs which may be awarded to a single company to no more than two at a time,thus taking Reliance Power out of the equation for the next round of four UMPPs. Two other UMPPs will follow the RFQ as soon as land issues and state politics are resolved,said Power Secretary HS Brahma.

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