Ban on import of power supercritical equipment

The ban on importing power equipment from abroad has been extended to all public sector projects. The government has asked all state and central power generators to buy supercritical equipment for their new projects from indigenous suppliers. NTPC and the Damodar Valley Corporation were the first government-owned companies that were told to buy Indian.The government made the Rs 45,000 crore NTPC bulk tenders for supercritical equipment, out of the reach of foreign players, especially the Chinese, by including an ‘indigenous manufacturing presence’ clause.The clause requires prospective bidders to either have a registered subsidiary or a joint venture company for manufacturing such equipment in India.

The move to extend the ban on overseas equipment suppliers will mainly benefit five companies: Bharat Heavy Electricals, L&T-Mitsubishi Heavy Industries, Alstom-Bharat Forge, Toshiba-JSW and Power Machines. All of them are setting up supercritical manufacturing facilities in India.

The role of suppliers from countries such as China and Korea will now be restricted to private projects in India, unless they set up shop in the country. The government seeks to encourage domestic manufacture of supercritical technology – a new area for Indian companies but a forte of foreign companies.

A senior Central Electricity Authority (CEA) official said the directive to incorporate the local manufacturing clause in tenders for sourcing supercritical boilers and turbine generators has been sent to 22 state-owned electricity generating firms including NTPC, Damodar Valley Corporation, Neyveli Lignite Corporation and North Eastern Electric Power Corporation.

“They have been told to incorporate the clause in their tenders be floated during next three years,” the official said.

A top NTPC executive said the company would follow the directive. The company is expected to start the second phase of bulk tendering in June. On being contacted a director of Neyveli Lignite confirmed receipt of  the directive.

According to CEA data, of 43 supercritical units bought by Indian utilities so far, orders for only four have been placed with Indian companies. Orders for 26 boiler-turbine sets have been placed with Chinese, eight with Koreans, three with Russian and two with Italian companies.

Thirty-eight supercritical units are under construction in the country, some of which would be commissioned by next March 2012. CEA expects that supercritical units would constitute 60 per cent of thermal capacity in the 12th plan, while the entire capacity in 13th plan will be based on the energy- efficient technology.