The fight between the department of heavy industries (DHI) and the ministry of power over the issue of placement of bulk order for power equipment on Bharat Heavy Electricals Limited (Bhel) is getting murkier.
Despite strong opposition from the ministry of power, the DHI has decided to move a Cabinet note for placement of bulk order, estimated at over Rs 25,000 crore, for the first lot of 10 units of 800-mw supercritical generators and boiler sets on Bhel.
Reacting to the development, the power ministry is learnt to have communicated to the cabinet secretariat that the proposal contained in the Cabinet note of DHI is in contravention of the Allocation of Business Rules, 1961, and should not be entertained for consideration by the Cabinet.
Under the Allocation of
Business Rules, 1961, all matters related to thermal and hydro-electric power and transmission & distribution network come under the jurisdiction of the ministry of power. Hence, according to ministry, the proposal contained in the CCEA note of the DHI is in contravention of the Rules.
The ministry has already told the DHI that supercritical power projects should be set up through the international competitive bidding (ICB) route, with mandatory condition of having a manufacturing base in India.
Moreover, a high-powered group under the chairmanship of the finance minister P Chidambaram has already deliberated upon the issue of placement of orders on Bhel and other bidders.
Besides Chidambaram, the group comprises of the power minister, the minister of heavy industries and the deputy chairman of the Planning Commission. The group is in the process of submitting its final recommendations to the committee of infrastructure headed by Prime Minister Manmohan Singh.
?Moving a CCEA note at this stage, pending the final recommendations of the group, pre-empts the decision of the group,? power ministry has reportedly told the cabinet secretariat. Officials said the entire focus of discussions during the meetings of the group was that the manufacturing base and competition for power equipment manufacturers relating to boiler and turbine generators should be enlarged through ICB process with the conditionality of progressive indigenous manufacture.
Placement of some orders on Bhel and other bidders who satisfy the requisite criteria could be considered thereafter.
