Fear of the dragon: Doors still open for all, says government

Even as it is in the process of almost abolishing its Mega Power Policy due to fears of the Chinese, the central government has nevertheless brushed aside all accusations of protectionism. In response to apprehensions expressed by various quarters, regarding the existence of internal policies that restrict foreign suppliers from participating in tenders floated by PSU power firms, especially NTPC and PGCIL, the power ministry claims that project developers are free to obtain equipment from domestic, as well as the international, manufacturers. 
According to the government, the phased manufacturing stipulations enshrined within the bulk tendering documents for NTPC`s initial supercritical units were incorporated only to promote a large domestic manufacturing base. This is, it is claimed, necessary to support large scale induction of supercritical units. Even the removal of the concessional duty regime allowed to Mega Power projects is not a discriminatory measure, since it only levels the playing field for smaller sized power plants, which already pay duty on equipment imports, claims the Centre.

 With respect to PGCIL, the government has asserted, no in-principle decision has been taken to confine the procurement of transmission equipment from bidders with domestic manufacturing facilities. For procurement of equipment for transmission lines and substations, PGCIL opts for domestic bidding and international competitive bidding (ICB), depending upon the technology, indigenous capability, funding requirements, etc.

 The only exception is the case of 765 kV transformers and reactors, wherein a decision has been taken to require foreign equipment manufacturers that opt to bid as a sole bidder to establish manufacturing facilities, as a subsidiary or a joint venture company, in India. This, as per the ministry, is considered prudent from the view point of long term service support and to encourage technology transfer and development of production capacity in India, which would require a very large number of such equipment in the coming years.