Chinese power equipment suppliers are expected to soon set up a dedicated repairing centre in India to address the after-sales service requirements of importers.
An agreement between Indian and Chinese companies, including Shanghai Electric, Dongfang Electric and Harbin Power, for setting up the service centre is on Prime minister’s Narendra Modi agenda during his China visit next week.
A local facility will help avoid the hassle of transporting damaged equipment back to China for repair, which results in undue delays and, consequently, prolonged plant shutdowns.
If the proposed centre is set up, private developers like Adani, Lanco, JSW Energy, Sterlite and Reliance Power, which have huge orders with Chinese vendors, will be assured of a quick response in case of a plant breakdown.
An agreement like this has been in the pipeline since both countries signed a memorandum of understanding (MoU) in 2013 to set up Power Equipment Service Centres (PESCs) during the then PM Manmonhan Singh’s Beijing visit. However, not much happened as Chinese power companies were still to make investments in India.
Says Prof Srikanth Kondapalli, Centre for East Asian Studies at JNU, “Indian companies like Reliance Power are facing problems with the power equipment bought from China. Setting up of a round-the-clock centre would be welcome.”
“Chinese vendors, which offer 15-20% lower price compared to domestic manufacturers, have bagged orders to supply equipment for more than 50,000 MW capacity. However, they do not have any service facility in India, making it tough to keep the power plants running after a breakdown,” said a government official.
There have been situations when equipment had to be sent to China for repair and power plants remained shut for months. Chinese companies like Dongfang have tried to look at tie-ups with BHEL and L&T for service stations but the plans did not materialise. As per government estimates, of the total thermal generation capacity of 48,540 MW commissioned under the 11th Plan (2007-12), main plant equipment for 18,187 MW was imported from Chinese manufacturers, mainly because of low costs and cheap financing. The trend has continued in the 12th Plan also.
Chinese equipment account for 12%, or 25,000 MW worth, of thermal plants in the country and an additional 42,000 MW capacity, based on equipment imports from China, are at various stages of commissioning.