Losers in China Win Power Deals in India

Chinese companies that are said to be blacklisted in their country have won several contracts to supply equipment to the Indian power transmission sector, giving local firms stiff competition by beating them on price. The local companies warn that their rivals sell substandard products.

Vendors from the neighbouring country have vanished from the main generation equipment markets in India as private companies have barely issued tenders in the last six years, but have strengthened their presence in transmission and distribution gear contracts.

“Most of the current Chinese suppliers have been blacklisted in their own country due to various issues including quality and inability to deliver on time, thereby causing significant project delays,“ an industry source said. “Some of the Chinese players, which are aggressive in the Indian gas-insulated substation segment, are facing disqualification and have been blacklisted in China.“

The Chinese companies couldn’t be immediately reached for comment.

The complaint is similar to that made several years ago when Chinese companies were accused of undercutting Indian suppliers of power generation equipment such as Bharat Heavy Electricals Ltd.

The gas-insulated substation is a critical component in the power transmission space and is manufactured in India by companies such as ABB, Siemens and Alstom T&D India that are facing stiff competi tion from cheaper Chinese and South Korean imports.

An executive at an Indian electrical equipment manufacturing firm said on condition of anonymity that quality of the cheap imports was suspect.

“In the absence of strict regulations and easy access, especially to the sub 400kV category , the Indian power sector has become a dumping ground for manufacturers from East Asia while domestic manufacturers suffer despite better quality products,“ the person said. “Besides extending manufacturing sops, the government could look to levy higher duties to discourage these cheap imports,“ he said.

Between 2005-06 and 20013-14, India’s imports of electrical equipment increased 19.73% to . 58,354 crore. China’s share in ` Indian imports of electrical equipment rose by nearly 40% in 2013-14 from 15.26% in 2005-06.

Due to cheaper imports, the local transmission and distribution equipment manufacturing sector is operating at less than 70% of its capacity.

Source: Economic  Times; 22 July 2015

URL: http://epaperbeta.timesofindia.com/Article.aspx?eid=31816&articlexml=Losers-in-China-Win-Power-Deals-in-India-22072015021019


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